In TheCarmody V

Multiple Choice

In theCarmody v.Toll Bros.,Inc.case discussed in the text,the Delaware Court of Chancery analyzed the question of the legality of a dead-hand pill under Delaware law.In striking down the dead-hand pill,the court ruled that:

A) the directors appropriately used the dead-hand pill which guaranteed that majority shareholders in place before a hostile bidding attempt were entitled to vote to block any later proposed vote on a merger.
B) the directors appropriately used the dead-hand pill because directors are entitled to use any means necessary in order to block a hostile takeover.
C) the dead-hand pill violated the state general corporation law for a number of reasons including that it violated the directors' duty of loyalty.
D) the dead-hand pill, which could only be redeemed by directors in office after a hostile bidder gained control or by their designated successors, violated the state general corporation law because it prejudiced directors in place prior to the takeover.