# kaal:claim:5583610-015

**Claim.** In a change of control setting, LER issuance that favors long-term holders over other shareholders is impermissible under Revlon because it can undermine the highest bid or fragment shareholder support.

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

**Holds when.**

- company in play for a change of control
- competing bids present

**Source quote.**

> LER issuers must avoid discriminatory LER voucher reward distributions. For example, LER issuance cannot favor long-term holders over others in a bidding war. This is impermissible because such LER reward allocation could undermine the highest bid

**From.** Wulf A. Kaal, *Liquid Equity Rewards in Corporate America* (2025), 4.3. Legal Boundaries Under Delaware and SEC Rules, page 20

**Cite as.** Wulf A. Kaal, Liquid Equity Rewards in Corporate America (2025). SSRN: https://ssrn.com/abstract=5583610

**Verify.** sha256 of source PDF `2d73609d95ddb1573acc2a9e7af617fbe6283d6e591deb6317f6d5d804517c62` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202025%20-%20Liquid%20Equity%20Rewards%20in%20Corporate%20America.pdf

**Failure mode.** Revlon tiering defect  (family: investor-protection-gap)

**Topics.** institutional-design

**Keywords.** revlon, change-of-control, bidding-wars, value-maximization

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