The Duty And Liability Of Target Company's Directors In Takeover Defenses

Takeover defense as a capital market's derivative, on one hand, is promoting the optimized allocation of resources, on the other hand, is exacerbating the combat of company control. In this race, target company directors face threats of income decrease and losing managers status, so they would likely "dug in self-preservation" which will probably damage the interests of company. Our country's legislation for takeover defense started only recently, the system also has not been set up completely, many places have legal blank, so it's hard to reconcile the interest conflicts. Therefore, how to deal with these conflicts of interests and guarantee the target company directors to fulfill their fiduciary duties during the takeover procedure has become an urgent matter for legislators'consideration.In order to strengthen the target company directors'duties and make acquisition and anti-takeover activities more orderly , the author made a comprehensive and in-depth research in this problem based on domestic and foreign company's acquisition practices, and referred to the developed economies'latest takeover defense regulations and classic cases.At first, this paper using comparative study on Anglo-American countries'law and theoretical basis, regarding to the right of making takeover defense decision. And based on China's current legislations, practical operation situations and the company legal environment, the author put forward the idea of shareholders' meeting shall have the right to make decision. Secondly, according to the background of the changing company system, the author analyzed the directors'duties'source and connotations, and clarify the relationship between the parties who involved in takeover defense process. Finally, by comparing the standard of Anglo-American target company directors and practical measures, the author tried to clarify the fiduciary duties standard of domestic target company directors in the process of takeover defense practices, and tried to extend the duties of directors under the background of foreign investment.