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Antidote sought by shareholders

Shareholders filed suit against Yahoo, seeking the elimination of a severance plan the company adopted to keep it from being taken over by Microsoft.

Following the call by corporate raider Carl Icahn to Yahoo chairman Roy Bostock to eliminate the plan, where Yahoo staffers would be free to leave the company under certain conditions with a generous payout after a takeover, a lawsuit by Yahoo's shareholders made a similar demand.

The litigants already have a case in the works against Yahoo, as the New York Times noted. Two Detroit pension plans that are already angry about the breakdown of Microsoft's lucrative takeover bid for Yahoo called for the company to eliminate the poison pill:

"If Icahn’s slate prevails, Yahoo shareholders will be funding huge cash severance and equity acceleration over the following two years for every employee who is either terminated or who resigns with 'good reason' as that phrase is loosely defined in the severance plans," the plaintiffs argued in a brief filed late Monday and made available to The New York Times.

Icahn and Bostock spent the past few days exchanging angry letters over the plan. Should Icahn get his way at Yahoo's upcoming annual meeting, Bostock and the rest of the Yahoo board would be replaced with a new slate of directors.

Everything started in late January when Microsoft made an unsolicited bid for Yahoo, then languishing in the market after a two-year decline in its stock price. The interest rejuvenated the appeal of Yahoo's stock, but the two sides could not come to an agreement, and Microsoft walked away from negotiating.

Microsoft still claims it isn't interested in purchasing Yahoo. However, with Icahn and other billionaire investors pushing for changes at Yahoo that would welcome an acquisition, one has to think the big-money types think they can convince Microsoft's Steve Ballmer to change his mind.