# kaal:claim:3017612-028

**Claim.** Standstill agreements defraud shareholders who are not parties to them in two distinct ways: by violating the shareholder's right to the best available merger or transaction and by discouraging unsolicited tender offers in which a significant control premium could be realized.

**Type.** failure  **Support.** argued

**Holds when.**

- standstill agreements binding only some shareholders
- applying the Schreiber v. Carney definition of fraud

**Source quote.**

> standstill agreements defraud shareholders not privy to the agreement in two ways: (1) by violating a shareholder's right to the best available merger or transaction, and (2) by discouraging unsolicited tender offers where a significant control premium can be realized.

**From.** Wulf A. Kaal, *Shareholder Agreements - National Report of the United States of America* (2017), III.4 Shareholders' Agreements in pre-insolvency situation, page 14

**Cite as.** Wulf A. Kaal, Shareholder Agreements - National Report of the United States of America (2017). SSRN: https://ssrn.com/abstract=3017612

**Verify.** sha256 of source PDF `33821db406f92efbe1698fbaed37687595c13b7ce5463b4a879df679fd4af1ac` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202017%20-%20Shareholder%20Agreements%20-%20National%20Report%20of%20the%20United%20States%20of%20America.pdf

**Failure mode.** standstill-disenfranchisement-of-nonparties  (family: investor-protection-gap)

**Topics.** institutional-design

**Keywords.** standstill-agreements, vote-selling, disenfranchisement, tender-offers, control-premium

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