In such circumstances, there is nothing that the directors can do to prevent shareholders selling a controlling interest if they so wish.
But laws and institutions were needed first to prevent powerful shareholders from channeling corporate wealth into their own pockets.
But it also prevents ordinary shareholders from attending more than a handful of meetings.
Mr. Breeden has argued that such reserves allow companies to manipulate profits, preventing shareholders from knowing the real trends in the business.
The chancellor said the defensive device improperly prevented shareholders from deciding between the restructuring and the tender offer.
This provides protection against a possible drop in the stock price, and it prevents shareholders from getting more if the price goes up.
Though securities laws prevent shareholders from trading on such information, small investors may be making decisions based on their incomplete knowledge of what is going on.
The rules are intended to prevent corporate officials and large shareholders from speculating in a company's stock.
It can, however, prevent shareholders from entering into certain agreements that can assist in a proxy fight, such as an agreement to pay another shareholder's expenses.
He often prevents large shareholders from asking questions on conference calls.