Delaware Supreme Court Approves Poison Pill Trigger Below 5 Percent

AGG Partner Henry R. Chalmers published an article titled “Delaware Supreme Court Approves Poison Pill Trigger Below 5 Percent” in the Winter 2011 issue of the American Bar Association Litigation News magazine.  Delaware Supreme Court recently allowed a corporation to defend itself against a hostile takeover bid by implementing a poison pill with a trigger of less than 5 percent of the corporation’s stock. Versata Enterprises, Inc. v. Selectica, Inc. The ruling continues that highest court’s deferential attitude toward aggressive shareholder rights plans, so long as the corporation implementing the plan can reasonably explain the low ownership threshold.

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