Household International, Inc. (Household), was a diversified holding company with its principal subsidiaries engaged in financial services,

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Household International, Inc. (Household), was a diversified holding company with its principal subsidiaries engaged in financial services, transportation, and merchandising. The board of directors of Household adopted a 48-page “Rights Plan” by a 14-to-2 vote. Basically, the plan provided that Household common stockholders were entitled to the issuance of one irrevocable right per common share if any party acquired 20 percent of Household’s shares. The right permitted Household shareholders to purchase $200 of the common stock of the tender offeror for $100. In essence, this forced any party interested in taking over Household to negotiate with Household’s directors. DysonKissner-Moran Corporation (DKM), which was interested in taking over Household, filed suit, alleging that this flip-over rights plan violated the business judgment rule. Who wins? Moran v. Household International, Inc., 500 A.2d 1346, Web 1985 Del. Lexis 557 (Supreme Court of Delaware)

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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