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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Published In: Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Jeff Dunlap, PowerlinePR | Attorney Advertising

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