Publications

August 25, 2010

Delaware Court of Chancery Affirms Use of Stockholder Rights Plan

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In Yucaipa American Alliance Fund II, L.P. v. Riggio, the Delaware Court of Chancery upheld the implementation of a stockholder rights plan by the board of directors of Barnes & Noble, Inc. The court specifically approved the plan’s grandfather provision which allowed Barnes & Noble’s largest stockholder to maintain its ownership level above the level that would otherwise trigger the rights plan. The court also discussed its views related to low-threshold stockholder rights plans, such as those adopted to protect net operating losses.