A Study On The Legal Problems Of The Loyalty Obligation System Of The Target Company In The Anti - Takeover

Nowadays, our government is going to adopt a broader takeover policy. As a result, there will be more and more takeover and anti-takeover events. Takeover is a fight for the control power. It follows by various anti-takeover methods. The takeover helps to reorganize and reassign the former property ownerships and control powers. However, the board of directors in the target company will lose its vested interest. Thus, how to effectively rule the fiduciary duties of the directors in the target company becomes the crux to balance the management power of the board of directors and preventing the right is abused. The target company directors’ behaviors could be well guided by a series of self-contained rules for regulating the fiduciary duties of the target company’s directors. Moreover, it will increase the efficiency of the capital market as well. But current system’s flaws cannot be ignored, and we must perfect it as soon as possible.The thesis will discuss and analyze the legal issues in four different parts.The first part discusses the basic legal theory about the fiduciary duties of target company’s directors. The writer starts from the concept of director and fiduciary duty. Then, discuss the relationship between company and directors, introduce the specific content of director’s fiduciary duties, and finally, analyze the values of the research in this thesis.The second part is talking about our current rule system regarding to the target company directors’ fiduciary duties in anti-takeover. The writer analyzes its flaws by focusing on the Corporation Law, Securities Law, Administration of the Takeover of Listed Companies Procedures and Guidelines for Articles of Association of Chinese Listed Companies.The third part deals with the U.S. mode. In this part, the writer introduces three important rules: the Business Judgment Rule, Unocal Rule and Revlon Rule, discusses their ways to apply, how to apply, and the potential values for our country.The fourth part shows the suggestions for rebuilding our rule system of target company directors’ fiduciary duties in anti-takeover. On the base of using the U.S. mode as reference, the writer gives us some solutions including: perfect the legislative system; set up our own director’s status theory in law; enrich the specific content of target company directors’ fiduciary duties in anti-takeover condition; perfect the company internal mechanism and derivative suit system.