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.
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