The man who invented the hostile takeover

Larry Ribstein —  13 September 2011

Henry Manne first theorized the market for corporate control, but the man who first put the concept into action was Louis E. Wolfson.  I blogged briefly about Wolfson when he died in 2008.  Now you can read more about him in Alan M. Weinberger, What’s in a Name?– The Tale of Louis Wolfson’s Affirmed, 39 Hofstra L. Rev. 645 (2011) (not on SSRN).  Here’s the abstract:

Why would someone choose to name a thoroughbred racehorse “Affirmed” after his conviction for federal securities laws violations had been affirmed on appeal? This inquiry is the basis for exploring the enigmatic life and spectacular career of Louis E. Wolfson, owner and breeder of the last winner of horse racing’s Triple Crown.

Perhaps best known as the central figure in the scandal that resulted in the forced resignation of Supreme Court Justice Abe Fortas, Wolfson left a sizable footprint on corporate legal history. He has been described as the original corporate raider, the inventor of the market for corporate control through the hostile tender offer, and the founder of the first modern conglomerate. Principal cases involving Wolfson appear in virtually all Corporations and Securities Regulation casebooks. Long the subject of academic study, commentary, and controversy, these decisions continue to be cited as authority for the partial indemnification of officers and directors, and the proposition that controlling persons expose themselves to criminal liability for effecting a distribution of unregistered shares through a broker.

Larry Ribstein

Posts

Professor of Law, University of Illinois College of Law