Delaware Supreme Court Affirms Chancery's Poison Pill Decision

Versata Enterprises, Inc. v. Selectica, Inc., No. 193, 2010 (Del. Supr., Oct. 4, 2010), read opinion here. In this 51-page decision, the Delaware Supreme Court affirmed the Court of Chancery's 71-page decision in Selectica, Inc. v. Versata, Inc., C.A. No. 4241-VCN, 2010 WL 703062 (Feb. 26, 2010), which was summarized on this blog here.

Delaware's High Court upheld the board's adoption of a poison pill rights plan with a 4.99% triggering threshold, designed to protect the corporation's net operating losses ("NOLs"), and a special committee's subsequent decision to deploy  the rights plan to dilute the triggering stockholder. Much more can be, and will be, written about this decision in the days to come.

Supplement: Professor Gordon Smith provides a scholarly review of the decision here.