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Abstract

The heightened level of takeover activity during recent years has provoked many innovative responses from the management of subject companies that wish to remain independent. Since successful acquisition of a company usually involves the termination of its existing management, that management will often seek to mobilize the resources of the subject corporation to oppose the takeover attempt. As a result, litigation initiated by management now plays a part in virtually every takeover contest. The case of Dan River, Inc. v. Icahn, a recent Fourth Circuit decision, illustrates the use of litigation to forestall a takeover attempt.

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