Mira Ganor (Texas), The Curious Case of Reverse Morris Trusts, 19 Va. L. & Bus. Rev. 227 (2025):

This Article analyzes the Reverse Morris Trust (RMT) transaction and shows that RMTs present a unique case of corporate governance. In an RMT the shareholders are positioned on both sides of the transaction while management is not, thus creating a misalignment of interests, which can be detrimental to the shareholders and potentially lead to inefficient transactions.

This Article shows that the common use of a split-off as part of the RMT transaction can benefit informed shareholders at the expense of unsophisticated shareholders. To address these concerns, this Article puts forward a proposed amendment to the tender offer rules—a default contingent tender rule.

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