The attempt by a nonmanagement group to gain control of the management of a firm by soliciting a sufficient number of proxy votes is called a ________.
A) hostile takeover
B) bankruptcy proceeding
C) proxy battle
D) management buyout

Question

Quizplus · Accepted Answer

A proxy battle is a struggle between two parties trying to influence the outcome of a vote by shareholders through the solicitation of proxy votes. The goal of the nonmanagement group is to gain control of the management of the firm by getting more proxy votes than the current management team. A hostile takeover is different from a proxy battle in that it involves an outside party attempting to buy a controlling interest in the company. A bankruptcy proceeding is a legal process by which a company declares itself unable to pay its debts and seeks protection from its creditors. A management buyout is a situation where the current management team of a company purchases a controlling interest in the company.

The Attempt by a Nonmanagement Group to Gain Control of the Management