Perspective
Jul. 24, 2014
Activist shareholder threats justify two-tiered poison pills
The Delaware Court of Chancery will allow for the use of a two-tier poison pill, provided that the circumstances surrounding its adoption are appropriate. By Rob R. Carlson and Michael J. Nieto
Earlier this year, the Delaware Court of Chancery held in Third Point LLC. v. Ruprecht that the board of directors of Sotheby's had not breached their fiduciary duties by adopting and refusing to waive the application of a two-tiered stockholder rights plan (also known colloquially as a "poison pill") during a preliminary injunction hearing in an attempt to enjoin Sotheby's from holding its annual m...
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