Business Negotiations: Imposing Procedural Constraints

Sometimes the courts will be unwilling to get involved in the substantive terms of the deal but will impose procedural constraints on the more powerful party.

Consider the case of a controlling shareholder in a publicly traded company - someone who holds more than 51% - who wants to “cash out” the minority shareholders.

Under the corporate law of every state, the board of directors and majority shareholders must approve the terms of the offer.