A Delaware Chancery Court on Monday denied a fast-track schedule to hold a trial on whether to invalidate Yahoo's controversial employee severance plans, prior to the company's annual shareholders meeting on August 1, according to a Reuters report.
Two Detroit pension funds, which had filed a shareholders lawsuit against Yahoo over its handling of the unsolicited buyout bid by Microsoft and subsequent withdrawal, had been seeking to invalidate Yahoo's employees severance plans. In the lawsuit, the shareholders allege the severance plans potentially make any change of control in ownership or board composition a costly venture.
The shareholders had sought to have a trial on the severance plans, prior to Yahoo's annual shareholders meeting, at which time investor activist Carl Icahn is currently planning to run a dissident slate to unseat Yahoo's entire board. The pension funds were concerned that unless the severance plans were invalidated, a successful election by Icahn would set off the first of two triggers needed to activate the plans.
Chancellor William Chandler, in issuing his order, stated Yahoo's recently announced Google search ad deal did not alter the plaintiffs core argument and did not justify an expedited trial, according to the Reuters report.
In the two-page ruling, Chandler also noted that he felt the Yahoo shareholders case had created a media maelstrom, one source familiar with the ruling told News.com.
Chandler noted he may hear Yahoo's motion to dismiss the amended lawsuit prior to its August 1 shareholders meeting, according to the source.