Tuesday, October 5, 2010
The Delaware Supreme court handed down its opinion in Versata v Selectica. You'll remember that Selectica amended its rights plan to protect its NOLs with a 4.99% trigger. The pill was then triggered when Trilogy aggressively bought through the 4.99% limit knowing that it might trigger the pill. Trilogy was looking to get into the courtroom apparently. The court upheld the board's adoption of the shareholder right plan with a 4.99% trigger, and the special committee's subsequent decision to deploy the pill to dilute Versata.
You can read the opinion here. If you're looking for an overview of the issues at stake, Robert Miller at Villanova Law published a nice little piece a couple of months ago (NOL Pill Reloaded) that's worth reading.
Generally speaking, the court upheld the Chancery Court opinion. Consistent with past practice, the court held that the proper standard of review for challenged board actions taken to defend the corporation or a corporate policy is Unocal. Applying Unocal, the court then largely concurred with Chancery's analysis. Moving on ...