Contractarian Theory and Unilateral Bylaw Amendments

Author:Albert H. Choi & Geeyoung Min
Position:Professor and Albert C. BeVier Research Professor of Law, University of Virginia Law School/Adjunct Assistant Professor and Postdoctoral Fellow in Corporate Law and Governance, Columbia Law School

Corporate directors have been utilizing a potent mechanism in dealing with shareholder activism and shareholder litigation: the right to unilaterally amend corporate bylaws. Directors have exercised this right, for instance, to impose various requirements on who can nominate a director or call a special shareholder meeting, or to designate an exclusive forum where the shareholders can bring suit. Based on the theory ... (see full summary)

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