Anti-Greenmail Provision

外汇网2021-06-19 13:36:34 43

A special clause located within a firm's corporate charter that acts as a deterrence against the board of directors passing a share buyback.

Taobiz explains Anti-Greenmail Provision

This provision acts as a pventative measure, restraining managers from buying back company stock at significant pmiums due to greenmail. A majority shareholder may be able to influence the board into purchasing shares at a significant pmium, so the anti-greenmail provision requires that a majority of shareholders (excluding the majority shareholder) agree to the buyback.

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