Bank of New York Co. v. Irving Bank Corp.
New York Supreme Court
536 N.Y.S.2d 923 (1988)
- Written by Heather Whittemore, JD
Facts
In 1987 Bank of New York (plaintiff) announced that it was going to attempt to acquire Irving Bank Corporation (Irving) (defendant). In response, the board of directors of Irving adopted a poison-pill rights agreement giving it the ability to resist an unwanted acquisition. The rights agreement included a flip-in provision, which provided that if any entity acquired 20 percent or more of the shares of Irving, all Irving’s common shareholders except that entity could purchase $400 of Irving common stock for $200, making it more difficult and more expensive for the entity to acquire Irving. Bank of New York filed a lawsuit in New York state court, alleging that the flip-in provision violated § 501(c) of the New York Business Corporation Law by discriminating among shareholders holding shares of the same class of stock.
Rule of Law
Issue
Holding and Reasoning (Cahn, J.)
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