A two-year legal battle over Illini Corp.'s poison-pill policy has ended in the Springfield, Ill., company's favor.
Macoupin County Judge Thomas Carmody last week dismissed two shareholder lawsuits against Illini, the $169 million-asset parent of Illini Bank. The suits, filed in 1998, questioned whether Illini could bar individual shareholders from owning more than 10% of its stock.
Both suits stemmed from a gift of 1,200 Illini shares that Ida R. Noll, daughter-in-law of one of the bank's founders, received from her mother in April 1998.
The gift nudged Ms. Noll's ownership above 10%, which was the threshold for triggering the poison pill. A poison pill is a plan designed to protect companies against hostile takeovers by authorizing additional stock to be issued at a reduced price to all stockholders other than the potential acquirer.
Shortly after Ms. Noll received the gift, however, the Illini board opted not to trigger the poison pill, ruling that she had acted "inadvertently."
Illini's refusal to act angered other shareholders, who filed a class action demanding that the rights plan be activated in order to increase the value of their holdings. The lead plaintiff was Mary K. Quinn, a former Illini employee who owns 21 shares, worth about $550.
Meanwhile, Ms. Noll filed her own suit, asking that the poison-pill provision -- adopted in 1997 -- be declared invalid because, she argued, it discriminated against Noll family members. The Nolls together own 31% of the company's stock.
Judge Carmody rejected Ms. Noll's argument as well as Ms. Quinn's contention that the poison pill should have been activated.
