Word: court
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Dates: during 1980-1989
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Time Warner came into existence last Monday after three Delaware Supreme Court judges delivered the final verdict in a seven-week battle that had riveted the attention of corporate America. Justice Henry Horsey matter-of- factly declared that the court had found "no error" in a July 14 lower- court ruling in which Chancellor William Allen denied a motion by Paramount Communications to block the merger of Time Inc. and Warner Communications. Said Horsey: "We therefore affirm the decision...
...part, Paramount dropped its $200-a-share hostile bid for Time after the supreme court ruling. The decision upheld Allen's finding that Time's management acted properly when it responded to Paramount's raid by converting the Time-Warner deal from a stock swap, which required shareholder approval, to a leveraged purchase, which needed no such vote. Paramount Chairman Martin Davis said he would "continue aggressively to build our core business in publishing and entertainment." Last week Paramount agreed to sell its financial-services subsidiary, Associates First Capital, to Ford Motor for $3.35 billion, which would give the communications...
...friendly mergers back in vogue? Just three days after the Delaware Supreme Court gave Time Inc. and Warner Communications the go-ahead to join forces, another megamerger was announced. Bristol-Myers (1988 sales: $6 billion) and Squibb ($2.6 billion) said they had agreed to an $11.2 billion stock swap that would create the world's second largest drug company. The friendly merger would be the largest so far in the current race to create globe-spanning pharmaceutical giants. The new company, with headquarters in Manhattan, would bring together such products as Bristol-Myers' Bufferin painkiller and Windex glass cleaner with...
...Delaware court rulings have created a more cordial climate for such deals. Before Time and Warner were allowed to consolidate, many companies feared that an agreement to merge would be tantamount to putting themselves up for sale. But the Delaware courts affirmed the right of corporate directors to pursue long-term strategies. Says Harvard law professor Reinier Kraakman of the new precedent: "This gives managers who are planning a friendly acquisition or a merger of equals a chance to go forward without losing out to a hostile acquirer...
...nagging possibility of an inherent design flaw in the DC-10 remains. In 1979 an American Airlines DC-10 taking off from Chicago lost its left-wing engine, tearing out its hydraulic lines; the plane crashed, killing 273. The I.A.P.A. won a federal court order that forced the FAA to ground the entire DC-10 fleet for inspection. The planes were inspected and sent aloft again five weeks later...