Definition of Asset-Liability Defense

Financial Terms Beginning with A

What is an Asset-Liability Defense

An asset and liability defense would involve using legal hurdles, barriers and maneuvers to make it more challenging to acquire the target company and to deter the acquirer from pursuing a hostile takeover attempt.

Here are a few options that a target company could choose to pursue.

Legal Lockups

The target company may be able to use legal challenges to halt or delay the acquisition by making it less lucrative to the acquirer or by making it illegal under existing law.

Asset Restructuring

The target company may be able to acquire assets that the acquirer does not want or that will create antitrust problems. Alternatively, the target company could sell valuable assets that the acquirer desires, thus making the acquisition less valuable to them.


The target company may seek a legal action through the FTC or SEC alleging that a merger or takeover violates antitrust or securities laws.

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Related Investment Terms

Black Knight

Hostile Takeover

White Squire Defense

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