Poison pill is a term referring to any strategy, generally in business or politics, to increase the likelihood of negative results over positive ones for a party that attempts any kind of takeover. It derives from its original meaning of a literal poison pill carried by various spies throughout history, taken when discovered to eliminate the possibility of being interrogated for the corporate enemy's gain. Privately Held, IPO Corps - Their LLPs & CPAs In publicly held companies, various methods to avoid takeover bids are called "poison pills". Takeover bids are attempts by a bidder to obtain control of a target company, either by soliciting proxies in a proxy fight to get elected to the board, by acquiring a controlling block of shares and using the associated votes to get elected to the board, or by alerting the target of the value of legal exposure for various crimes committed, in & out house, by oral or written contract, en mass. Once in control of the target's board, the bidder can determine the target's management. As discussed further below, targets have various takeover defenses available, and several types of defense have been called "poison pills" because they not only harm the bidder but the target’s business (or its block shareholders money) as well. At this time, the most common takeover defense known as a poison pill is a [staff] shareholder rights plan, which is arises first in the order of priority over people live stock gamblers in the event of bankruptcy. Correct Pricing/Pay Proof Compliance Enforcement GAAP "Poison pill" is sometimes used more broadly to describe other types of takeover defenses that involve the target taking some action that harms both target and bidder, although the broad category of takeover defenses is more commonly known as "shark repellents" and includes the traditional [employee work investment] shareholder rights plan poison pill. The poison pill was invented by noted M&A lawyer Martin Lipton of Wachtell, Lipton, Rosen & Katz, in 1982, as a response to tender-based hostile takeovers. Poison pills became popular during the early 1980s, in response to the increasing trend of corporate raids by businessmen such as Carl Icahn.1 Wachtell Lipton has represented blue-chip clients like AT&T, Kraft, and JP Morgan Chase. The firm is also known for its skill in [anti-protocol] business litigation. It has handled many of the precedent-setting Delaware corporate governance cases. One of their most recent clients was Larry Silverstein, owner of the two 110-story towers of the World Trade Center. A corporate raid is a business term for securing a large interest in a corporation and then using voting rights to enact measures directed at increasing value. The measures might include replacing top executives, downsizing operations, or liquidating the company.2 The attached one page IT disclosures are presented to assist understanding the real simple rules compliance orders, with the exposures for crossing them, intentionally, which renders the acts uninsurable.
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http://en.wikipedia.org/wiki/Poison_pill http://en.wikipedia.org/wiki/Corporate_raid