"It was the age of the corporate raider," says Martin Lipton, senior partner, Wachtell, Lipton, Rosen & Katz, referring to the period of mounting tensions between company management and shareholders that led up to his invention of the poison pill in 1982 while defending El Paso Corp. in defense of a hostile tender offer by Burlington Northern Railroad.* "By the early 1980s, we had reached a whole new plateau of hostile takeovers, and we had very little in the way of defense to them." In this video conversation with The Deal magazine editor in chief Robert Teitelman, Lipton explains how he developed the poison pill to "level the playing field." Poison pills have since become standard tools in company arsenals. In 2010, J.C. Penney Co., Barnes & Noble Inc. and Airgas Inc. used poison pills. We caught up with Lipton at The Deal Economy 2011, an invitation-only event for prominent dealmakers hosted earlier this month by The Deal LLC at the New York Stock Exchange. For more on corporate governance from the event, see our conversation with Morgan Stanley's global head of M&A Robert Kindler. - Mary Kathleen Flynn
*A previous version of this article misidentified the hostile bidder as General American Oil.