New and Simplified Defensive Strategies Against Corporate Raiders in Value-Destroying Merger & Acquisition Attempts: Behavioral-Finance-Based Models as Legal Defense Strategies and Litigation Finance as Funding Vehicle

Abstract

With continued attacks by some short-sighted, value-destroying, highly secretive, and deep-pocketed corporate raiders against many well managed and value-maximizing companies like Amgen and Allergan here in California, there is a need for further development and deployment of robust and unconventional legal strategies to counter and neutralize such attacks. Attacks that are not even zero-some games in our societies. They are effectively ransom-seeking assaults by face-less and community-less financiers that may not only lead to forced break ups and possibly eventual destruction of well-managed and resource-challenged companies; but they may also lead to destruction of whole communities. My main arguments against such takeover attempts draw upon well-established economic/financial theories and practices that could be used in defense strategies in the courts of law. One set of strategy involves real-life and trust-based versions of the otherwise non-functioning Principal-Agent theory; another set involves newly developed Behavioral-Finance-based Value/Risk models and strategies. The financing strategy of choice for all such cases would be the growing Litigation Finance vehicle.