The Triggering Function of Sale of Control Doctrine

Controlling blocks of stock generally command a premium. Current doctrine allows controlling shareholders to sell without sharing this control premium in most, but not all, circumstances. The two dominant schools of academic thought on sales of control agree on one point: this current doctrine is wrong. Under one school of thought, the equal sharing school, noncontrolling shareholders should always have the right to share in a sale of control at a premium price.' Under the other school of thought, the deregulatory school, premium control sales should never have to be shared.2 Both schools regard current doctrine as unsatisfactory. This gulf between doctrine and academic analysis is unfortunate. Because neither school offers a coherent justification for current doctrine, courts adjudicating sale of control cases lack principles to guide the resolution of doctrinal ambiguities. This might be tolerable if the ambiguities were relatively minor. But, as I show in Part I, here the applicable law resembles less a deterministic doctrine than a dialectic between a general rule and a set of amor-_ phous exceptions. The result is that the adjudication of sale of control cases has a seemingly unpredictable and rudderless quality. This gulf is also unfair to the doctrine. Notwithstanding the apparent uncertainty and the critique from both schools, current sale of control doctrine reflects an ingenious response to a problem endemic to all legal doctrines: the inevitability that any legal doctrine will deter some desirable behavior and fail to deter some un-