The threat of greenmail
by minority creditors to hold up a restructuring using a scheme can lead to significant value leakage from the restructuring where the scheme proponents need to effectively pay off minority class creditors in order to secure their approval.
generally refers to a target corporation buying back a potential acquirer's shares at a premium in exchange for the potential acquirer agreeing not to own any target shares for a period of time.
100) The Internal Revenue Code defines greenmail
when managers of a corporation seek to maintain their position by actions such as greenmail
or the institution of other active and preventative corporate defenses, stockholders experience reduced wealth when management takes actions to deter attempts to take control of the corporation.
162) In this respect, some hedge funds ape the greenmail
tactics of the 1980s; the difference is that greenmail
is today difficult to extract from wary directors, or even illegal under state law.
The Canadian securities law regime differs significantly from the regulatory environment in the United States which prompted the creation of the Pill and which permits two-tier front-end loaded junk bond-financed bust-up acquisitions, street sweeps and greenmail
En 1978 Julio Mario ataco a sus antiguos aliados, el denominado Grupo Empresarial Antioqueno, cuando adquirio dos millones de acciones de Suramericana, que compro por intermedio de las empresas Dupesa y Cervunion, utilizando la estrategia de greenmail
para revenderlas a los industriales "paisas" y obtener asi de los antioquenos las acciones que poseian en Bavaria y Cervunion por las acciones que el tenia en Suramericana (45).
outcome--when an activist successfully extracts greenmail
, or a hedge
54) In a hostile takeover, the target company may employ greenmail
as a defense to the takeover.
First, the repurchase can be considered as greenmail
, if the company buys back stock from a potential raider at a premium above the market price.
based Pathmark Stores, starting with an unfortunate greenmail
attempt, a leveraged buyout by Merrill Lynch shortly thereafter, and later, an acquisition deal with Ahold that was quashed by the Federal Trade Commission.