Foley Partner Gardner Davis and Associate John Wolfel authored an article titled “Del. Court Upholds Low-Threshold Poison Pill to Protect NOLs” in the March 22, 2010 issue of the Delaware Corporate Litigation Reporter. The authors discuss the possible impact of a Delaware Chancery Court opinion that upheld a shareholder rights plan used by Selectica to protect the company’s net operating loss carry-forwards (NOLs). They note the court’s acknowledgment that accumulated NOLs could provide a convenient pretext for perpetuating a board-preferred shareholder structure, adding that shareholder rights plans must be subject to careful review.
