Shareholder Inspection Demand to Obtain Internal Investigation Documents “Not Essential” To Identified Proper Purpose

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Aggrieved Stockholders often seek production of the books and records of a corporation when challenging corporate decisions in shareholder derivative actions, minority oppression cases, and related contexts. Inspection demands are a time tested strategy to put pressure on the corporation or majority shareholders to dissuade them from taking allegedly unfair or unauthorized actions or as a prelude to litigation. One of the most important safeguards for the corporation is the requirement that a shareholder demand articulate a proper purpose for inspection of the corporation’s books and Records. Frequently, the determination of what is a proper purpose and the scope of the production to meet the proper purpose is disputed.

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