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Shareholder lawsuit to expose Yahoo severance plan?

Judge may decide to unseal portions of an amended shareholder complaint, potentially offering new light on the company's controversial employee severance program.

A Delaware Chancery Court judge may decide within a week or two whether to unseal portions of an amended shareholder complaint against Yahoo, following a conference call with the parties on Tuesday.

The initial complaint centers on allegations that the Internet search pioneer stonewalled Microsoft's unsolicited buyout bid.

Two Detroit pension funds initially filed a lawsuit against Yahoo in late February (PDF). Three months later, the shareholders amended the complaint (PDF) with information gathered during the discovery process and depositions.

Yahoo seeks to keep information gathered in the discovery process and depositions sealed, while the plaintiffs want it unsealed. A conference call was held Tuesday to discuss the redactions Yahoo made on the amended complaint.

A copy of the transcripts may become available shortly, according to lawyers involved in the case. But whether, and to what degree, portions of the transcript will be redacted has yet to be seen.

One of the issues, according to David Margules, a partner at Bouchard, Margules & Friedlander, and co-counsel for the plaintiffs, centers on how Yahoo responded internally when Microsoft made its bid, establishing a severance program for all full-time employees. The shareholders characterized the severance program as a de facto "poison pill" that makes a buyout of Yahoo more expensive.