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Email In a May 2, 2014 ruling relating to activist hedge fund Third Point LLC’s proxy battle with auction house Sotheby’s, the Delaware Chancery Court found that Third Point was not likely to succeed in its argument that the Sotheby’s board violated its fiduciary duties when it adopted a two-tiered stockholder rights plan in response to a rapid accumulation of shares by activist funds and later refused Third Point’s request for a waiver of the rights plan. While the Court did not address the claims on the merits, the preliminary injunction opinion offers important guidance for boards in deploying a rights plan, particularly one that treats active and passive stockholders differently. https://www.cadwalader.com/resources/clients-friends-memos/delaware-upholds-sothebys-poison-pill-defense-against-activist-citing-negative-control-as-a-corporate-threat