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.
