Chancery Strikes Down Williams Cos. Poison Pill Measure

Law360 (February 26, 2021, 10:49 PM EST) -- An "extreme" poison pill anti-takeover measure adopted by pipeline giant The Williams Cos. last year was struck down by Delaware's Chancery Court on Friday, with a vice chancellor finding that directors failed to show the measure was a reasonable response to a specific concern.

In a 90-page post-trial opinion, Vice Chancellor Kathaleen S. McCormick described poison pills, or shareholder rights plans, as "the nuclear weapon" of corporate governance, allowing companies to counter shareholder stockpiling of shares by triggering a right for others to buy a larger number of shares, foiling takeover votes or other purportedly threatening initiatives.

Although pills triggered by...

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