Filed under: Deals

Who knew that the severance plan adopted by Yahoo! Inc. (NASDAQ: YHOO) in the aftermath of an acquisition offer by Microsoft Corp. (NASDAQ: MSFT) would turn into a large, contentious issue in a proxy fight staged by Carl Icahn and, now, a shareholder lawsuit?

Lawyers representing the Police and Fire Retirement System of Detroit are asking a Delaware court to invalidate the severance plan, saying the associated costs, estimated at between $500 million and $2.1 billion, could effectively bar Microsoft from acquiring Yahoo!. It was adopted in February after Microsoft offered to acquire Yahoo! for $44.6 billion, and has drawn criticism from Icahn, who has labeled it a “poison pill.” Yahoo! is arguing that it needed to adopt the severance plan in order to retain employees.

The complaint seeks a trial date before Yahoo!’s annual shareholder meeting on Aug. 1.

Continue reading at TechConfidential.com.

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This entry was posted on Sunday, June 15th, 2008 at 6:24 am and is filed under Engagements and Deals News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.