NOL and Void

Foley Partner Gardner Davis and Senior Counsel Danielle Whitley authored an article titled “NOL and void” in the April 5, 2010 issue of The Deal. The authors discuss a Delaware Court of Chancery decision that upheld Selectica Inc.’s selection of a shareholder rights plan, or poison pill, as a tool to protect its net operating loss carry forwards (NOLs), remarking that it is the first time that a Delaware court has reviewed a board’s decision to adopt a poison pill intended to guard NOLs. They add that the decision should not be interpreted as support for the suggestion that a board can safely adopt a poison pill in every circumstance, noting the court’s acknowledgment that shareholder rights plans must be subject to careful review.