Greenmail is a controversial corporate takeover defense where a company buys back its shares from a hostile bidder at a premium to prevent a takeover.

This practice, considered by some to be corporate blackmail, raises ethical concerns because it rewards aggressive behavior, dilutes shareholder value, and protects management. 

While not illegal, greenmail's legality can be challenged if it unjustly benefits management or harms shareholders. Ultimately, it presents a complex issue regarding fairness and transparency in corporate governance.

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