The Puzzling Paradox of Preferred Stock (And Why We Should Care About It)

Lawrence E. Mitchell, Case Western University School of Law

Abstract

While Brudney's proposed standard is quite workable and defensible in the dividend arrearage and merger contexts he discussed, he did not fully address the question of when fairness standards are to be applied in assessing the effects of corporate transactions upon preferred stockholders. That is the major thrust of this Article, and when this question is answered it becomes clear that a less specific and more overarching standard of fairness needs to be developed