Louisiana Municipal Police Employees’ Retirement System v. Laub et al., Del. Ch., C.A. No. 4161. The Delaware Chancery Court ruled from the bench on May 19, 2009 in this matter involving a contested Poison Pill of Amtel Corporation in connection with a merger proposal. The complaint filed with the court is available here. Courtroom View Network has a video of the oral argument on May 19, 2009 available here.
Kevin Brady, a highly respected Delaware litigator, has compiled an overview of the court’s ruling from the bench, though no written decision from the court is yet available as of this posting. Bloomberg has an article about the ruling here.
On Tuesday, May 19, 2009, after a hearing in the Court of Chancery, Chancellor Chandler ruled that Atmel Corporation’s changes to its Poison Pill takeover defense were not improper. The conflict arose when a group of Atmel stockholders filed a class action against Atmel’s directors and officers seeking to invalidate the amendments to the Poison Pill. The plaintiff claimed "bad faith breaches of fiduciary duty" by Atmel’s Board of Directors and senior management in response to a merger proposal from Microchip Technology Incorporated and ON Semiconductor Corporation when the Board amended the company’s Poison Pill to make it "significantly more onerous and potentially preclusive and destructive to shareholder value, without regard to proportionality or to how such a drastic measure could conceivably benefit Atmel shareholders." No written ruling has been issued by the Court as of this posting.
Atmel’s pre-existing Poison Pill precluded a hostile tender offer from closing if the bidder acquired more than 20% of Atmel’s outstanding shares. Atmel’s directors amended the pill to, among other things, decrease the percentage from 20% to 10% and change the definition of beneficial ownership" which according to the plaintiff’s complaint "effectively accelerated the rate at which Microchip, ON Semi and their "Affiliates" and "Associates" will reach the 10% threshold necessary to trigger the Poison Pill."