Judge Rejects Bid to Move Up Yahoo! Trial

SAN FRANCISCO -- A Delaware judge has rejected a request by Yahoo!(YHOO Quote) shareholders for an expedited trial.

Judge William Chandler said the shareholders' lawyers failed to demonstrate "a sufficient possibility of a threatened irreparable injury" as required in order for the expedited trial to be granted.

"Aside from the maelstrom of media coverage, very little has changed about plaintiffs' core contentions since I denied plaintiff's previous request for expedition," Chandler stated in his decision.

In February, shortly after Microsoft(MSFT Quote) made an unsolicited bid to acquire Yahoo!, two Detroit pension funds filed a lawsuit claiming that Yahoo! had purposely tried to sabotage a merger.

They specifically pointed to a severance package created by Yahoo! for its employees as proof that the company was deliberately trying to make a merger with Microsoft unduly burdensome.

Microsoft ultimately pulled out of merger talks on May 3, which the plaintiffs largely blamed on the severance packages. The two companies also failed to come up with an alternative deal that would involve Microsoft buying Yahoo!'s search business. Instead, Yahoo! has agreed to outsource some of its online ads to rival Google(GOOG Quote).

Last week, the plaintiffs' lawyers requested that the trial date be set ahead of Yahoo!'s annual meeting on Aug. 1, at which time shareholders will vote whether or not to re-elect the company's board of directors. But Chandler noted that Yahoo! had filed a motion to dismiss the lawsuit.

"I encourage the parties to confer and set a prompt briefing schedule on defendants' motion," he said. "The Court is willing to and capable of deciding that motion before the Yahoo! annual shareholders' meeting on August 1, 2008."

Shares of Yahoo! were down 2.2%, or 51 cents, to $23.03 in recent trading.