In the case below, Vice Chancellor Noble issued a declaratory judgment recognizing the validity of Selectica's poison pill, or shareholder rights agreement, which had a 4.99% ownership threshold.
When the poison pill was triggered, Selectica was preparing for a potential sale, and Selectica considered its $160M in NOLs to be an important asset for potential buyers.
Vice Chancellor Noble concluded that Selectica's Board reasonably understood that Trilogy and its subsidiary Versata, which competed with Selectica, seriously threatened to impair the value of Selectica's NOLs for their own advantage, and that the NOLs were worth preserving.
On appeal to the Delaware Supreme Court, Trilogy and Versata argue that (1) Selectica's board did not undertake a reasonable investigation prior to adopting the NOL poison pill; and (2) Selectica's poison pill was preclusive because it effectively prevented a successful proxy challenge.
[Images are from the case below in the Delaware Court of Chancery, Selectica v. Versata.]