safe harbor
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Safe harbor
Often used in risk arbitrage as a form of shark repellent. A target company acquires a business so onerously regulated that it makes the target less attractive, giving it, in effect, a safe harbor.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Safe Harbor
1. An anti-takeover measure in which a potential target company buys a subsidiary in an industry that is so strictly regulated that it makes acquiring the target company difficult and/or expensive.
2. Legal protection from a lawsuit. Regulators often apply safe harbor to some corporate actions as long as those actions are taken in good faith.
2. Legal protection from a lawsuit. Regulators often apply safe harbor to some corporate actions as long as those actions are taken in good faith.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
safe harbor
1. A regulation that protects individuals or corporations from the legal consequences of certain actions they undertake. For example, firms filing forecasts with the SEC have a safe harbor from individuals or businesses that use the forecasts and are subsequently damaged (that is, they lose money), as long as the forecasts were prepared in good faith.
2. A tactic in which the target of an unfriendly takeover makes itself less attractive by taking a specific action.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
safe harbor
A system of rules that, if followed exactly, will provide protection from the effects of other laws. For example, in a 1031 like-kind exchange, the use of a qualified intermediary and compliance with strict IRS deadlines will result in the ability to avoid paying taxes at the time of a sale.This is the safe harbor from normal tax liability rules.There are other ways to complete a like-kind exchange without paying taxes,but the seller embarks upon those uncharted waters at its own peril. A very slight miscalculation could result in the imposition of large taxes, penalties, and interest at a later date.
The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.