1995) is the leading case on a board of directors' ability to use defensive measures, such as poison pills or buybacks, to prevent a hostile takeover.

The case demonstrates an approach to corporate governance that favors the primacy of the board of directors over the will of the shareholders.

The trial court found that the offer represented a threat of "substantive coercion", and based on the Unocal v. Mesa Petroleum test, the poison pill was reasonable but the repurchase was not.

The issue before the Supreme Court of Delaware was whether the repurchasing was a reasonable reaction to American General's threat.

The court must first determine whether the defensive measure is "draconian" in that it has the effect of precluding or coercing shareholders choice.