A more thorough explanation:

Scorched-earth defense is a strategy used by corporations to prevent a hostile takeover. It involves selling off the company's most valuable assets or divisions to reduce its overall value, making it less attractive to potential buyers.

For example, if a company is being targeted for a takeover, it may sell off its profitable subsidiaries or divisions to reduce its value. This makes it less appealing to the acquiring company, as they would be getting less value for their investment.

Another example of scorched-earth defense is when a company takes on a lot of debt to make itself less attractive to potential buyers. This can make it more difficult for the acquiring company to finance the acquisition, and may deter them from pursuing the takeover.

Overall, scorched-earth defense is a way for companies to protect themselves from hostile takeovers by reducing their value and making themselves less attractive to potential buyers.