Poison pills with a twist: Delaware decisions approve stockholder rights plans with unorthodox provisions


Corporate and Business Law

This is the second installment of a two-part series on the return of the poison pill (stockholder rights plans) that addresses lessons learned in 2010 from the Selectica and Barnes & Noble cases, new technologies and recent trends. Last week's installment described the nuts and bolts of poison pills.

In 2010, Delaware courts upheld the use of stockholder rights plans, or poison pills, including features that had not previously been expressly sanctioned. In these cases, the Delaware courts reiterated that the Unocal/Unitrim standard applies to poison pills and held that the boards that adopted and applied the subject plans satisfied their burdens of demonstrating that their actions were reasonable in relation to the threats posed.

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Sheppard Mullin Richter & Hampton LLP | Attorney Advertising

Written by:


Sheppard Mullin Richter & Hampton LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.