A recent takeover battle targeting a Michigan company illustrates weaknesses in Michigan law that should be rectified by the legislature, according to a report prepared by Anderson Economic Group principal Patrick L. Anderson. Under current law, as interpreted in a federal court case, Michigan shareholders can be disenfranchised (prevented from voting their shares).

The disenfranchisement of shareholders is inconsistent with the free enterprise system, and inconsistent with the legislature's intent in adopting Michigan's business law. Furthermore, other aspects of Michigan's corporate law deviate from the national standard, making it risky for companies to domicile in Michigan.

Project Update: HB 4764, as introduced by Rep. Bill Huizenga (R-Zeeland) and passed with strong bipartisan support by the Michigan House and Senate, was signed into law on October 7, 2003 by Michigan Governor Jennifer Granholm. The bill clarifies the original intent of Michigan's "Control Shares Acquisition Act," and protects Michigan businesses against a loophole that actually facilitated hostile takeovers. With the law being clarified, Simon Property Group decided to end its attempt at a hostile takeover --which was largely dependent on the loophole -- of rival The Taubman Company, a Michigan corporation.