News & Analysis as of

Section 220 Request

Court of Chancery Imposes Incorporation By Reference Condition On Books and Records Production

by Morris James LLP on

The City Of Cambridge Retirement System v. Universal Health Services Inc., C.A. No. 2017-0322-SG (Oct. 12, 2017) - A stockholder may inspect a corporation’s records for any recognized proper purpose, including...more

Incorporation Condition In Confidentiality Agreement Upheld In Books And Records Action

by Fox Rothschild LLP on

In the recent DGCL Section 220 books and records decision of The City of Cambridge Retirement System v. Universal Health Services, Inc., C.A. No. 2017-0322-SG (Del. Ch. Oct. 12, 2017), the Court of Chancery considered the...more

Chancery Declines Applying 'Garner' Exception to Privileged Documents in Books-and-Records Action

by Morris James LLP on

In the recent decision in Salberg v. Genworth Financial,the Delaware Court of Chancery declined to compel the production of attorney-client privileged documents in a books-and-records action. In Salberg, Vice Chancellor...more

Delaware Court Of Chancery Recommends Limiting The Preclusive Effect Of Prior Decisions On Demand Futility In Derivative Lawsuits ...

by Shearman & Sterling LLP on

On July 25, 2017, Chancellor Andre G. Bouchard of the Delaware Court of Chancery issued a supplemental opinion, responding to a remand order from the Delaware Supreme Court, in which Chancellor Bouchard recommended that the...more

Court Of Chancery Protects Privilege In Books and Records Action And Addresses Corwin’s Effect On Mismanagement Investigation...

by Morris James LLP on

Salberg v. Genworth Financial Inc., C.A. No. 2017-0018-JRS (July 27, 2017) - This is an important decision for its analyses implicating the Garner and Corwin rules. The Garner rule is that, under certain narrow...more

Court of Chancery Advocates New Test Governing Preclusion in Derivative Litigation

by Morris James LLP on

In re Wal-Mart Stores Inc. Delaware Derivative Litig., C.A. No. 7455-CB (Del. Ch. July 25, 2017) - This is an important decision holding that just because one derivative litigation was dismissed for failure to overcome...more

Court Of Chancery Explains Stock Restriction Law

by Morris James LLP on

Henry v. Phixios Holdings Inc., C.A. No. 12504-VCMR (July 10, 2017) - This is the rare decision explaining when restrictions on stock transfers (permitted by Section 202 of the DGCL) can be enforced. While the statute...more

"Court of Chancery Provides Guidance on 'Credible Basis' Standard for Obtaining Books"

The Delaware Supreme Court has held that strict adherence to the procedural requirements of Section 220 of the Delaware General Corporation Law “protects the right of the corporation to receive and consider a demand in proper...more

"Q&A With Delaware Litigation Partner Ed Micheletti"

What is the most significant recent development in Delaware, from a litigation standpoint? The most significant recent development impacting deal litigation in Delaware is the continuing evolution of the Corwin doctrine,...more

Chancery Finds Credible Basis for Wrongdoing Warranting Inspection of Books and Records

by Fox Rothschild LLP on

As discussed in various prior posts, a petitioner making a Section 220 books and records demand must state a “proper purpose” to justify inspection. Commonly approved purposes include valuation of stock, and investigation of...more

Former CEO Granted Right To Inspect Books And Records Of Company After Demonstrating At Trial A "Credible Basis" To Infer...

by Shearman & Sterling LLP on

On April 17, 2017, Chancellor Andre G. Bouchard of the Delaware Court of Chancery ruled, in a post-trial decision, that defendant Cypress Semiconductor Corporation (“Cypress”) must allow plaintiff and former Cypress CEO, T.J....more

Chancery Court Holds That Squeezed Out Stockholders Lack Standing to Compel Inspection under DGCL § 220

On February 27, 2017, the Delaware Court of Chancery addressed an important matter of first impression under Delaware law: "Must a plaintiff seeking corporate records under Section 220 of the Delaware General Corporation Law...more

Delaware Court of Chancery Holds that Cancellation of Shares Through Merger Deprives Stockholder of Standing in Section 220 Action

In Weingarten v. Monster Worldwide, Inc., C.A. No. 12931-VCG, 2017 WL 752179 (Del. Ch. Feb. 27, 2017), the Delaware Court of Chancery (Glasscock, V.C.) clarified when a plaintiff has standing to vitiate inspection rights...more

Delaware Chancery Court Holds That Former Stockholder Lacks Standing To Bring Section 220 Action For Inspection Of Books And...

by Shearman & Sterling LLP on

On February 27, 2017, Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery dismissed for lack of standing a lawsuit for inspection of corporate books and records brought by a former stockholder squeezed out in...more

Court of Chancery Holds That A Books And Records Plaintiff Must Be A Stockholder At The Time Of Suit

by Morris James LLP on

This decision resolved a matter of first impression: a plaintiff seeking corporate records under Section 220 of the DGCL must be a stockholder at the time he files his complaint to have standing. Thus, when a stockholder...more

A Former Shareholder Cannot Demand Books and Records Under DGCL§ 220

by BakerHostetler on

Can a former shareholder whose stock was cancelled in a merger bring suit for corporate books and records under Delaware law? In a recent decision, the Court of Chancery gave a clear answer to this question of first...more

Court Of Chancery Stresses Importance Of Records Demand In Lead Counsel Battle

by Morris James LLP on

When asked to choose the lead plaintiff and class counsel, the Court of Chancery applies the well-known Hirt factors. As this decision demonstrates, the Court also will place some significant weight on which of the competing...more

Shareholders Seeking Books and Records Must Demonstrate Credible Basis to Infer Wrongdoing

by Bracewell LLP on

On February 2, 2017, the Delaware Court of Chancery reaffirmed that shareholders seeking to inspect the books and records of Delaware corporations must demonstrate a credible basis to infer corporate wrongdoing. Accusations...more

Court Of Chancery Holds That Wrong Forward Looking Statement Insufficient To Support Records Inspection

by Morris James LLP on

It is not enough that certain forward-looking statements failed to come true to justify requiring an inspection of corporate records. More evidence of wrongdoing is needed if your inspection is based on a theory of...more

Court of Chancery Explains Role of Records Demand in Alleging Wrongful Pre-Suit Demand Refusal

by Morris James LLP on

This decision examines when pre-suit demand may be excused because the board who refused the demand declines to disclose the report of its investigation when responding. In this case, the board’s unwillingness to disclose the...more

Court Of Chancery Denies Inspection When The Board Has An Obvious Defense To A Claim Of Wrongdoing

by Morris James LLP on

In general, the bar is low for exercising inspection rights to investigate claims of wrongdoing. Plaintiffs need provide only some evidence to suggest a credible basis from which the Court can infer possible mismanagement or...more

Court: Derivative Claims Allowed to Be Asserted as Part of Merger Attack

by Morris James LLP on

It is well-settled under Delaware law that in a merger a stockholder loses standing to assert a purely derivative claim. That claim passes instead to the acquiring company. As an asset of a Delaware company, derivative claims...more

Court Of Chancery Limits Inspection To A Real Stockholder

by Morris James LLP on

This decision holds that when stock issued is void, the recipient is not entitled to records inspection even if he is listed as a stockholder on the company's stock ledger....more

When a Director May Inspect the Company's Books and Records

by Morris James LLP on

Section 220(d) of the Delaware General Corporation Law (DGCL) permits a director to inspect a company's books and records "for a purpose reasonably related to the director's position as a director." It is well settled under...more

Chancery Analyzes Limits of 'Reasonable Conceivability'

by Morris James LLP on

In 2011, the Delaware Supreme Court in Central Mortgage v. Morgan Stanley Mortgage Capital Holdings, 27 A.3d 531, 537 (Del. 2011), unequivocally stated that the "pleading standard in Delaware to survive a motion to dismiss is...more

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