News & Analysis as of

Books & Records

Delaware Court Of Chancery Grants Books And Records Demand, Holding That Corwin Is Irrelevant To Section 220 Proceedings

by Shearman & Sterling LLP on

On December 29, 2017, Vice Chancellor Joseph R. Slights III of the Delaware Court of Chancery granted a stockholder’s demand to inspect books and records related to the acquisition of West Corporation (“West”) by Apollo...more

“You’re Not Fully Clean”: § 220 Inspection Demands Under Corwin

by Shearman & Sterling LLP on

On December 29, 2017, the Delaware Court of Chancery declined to extend the ruling in Corwin by finding that the approval of a merger by a vote of the disinterested stockholders does not act as an impediment to a properly...more

Court Of Chancery Explains Inspection Rights Under An LLC Agreement

by Morris James LLP on

Aloha Power Company LLC v. Regenesis Power LLC, C.A. 12697-VCMR (Dec. 22, 2017) - This books and records decision addresses inspection rights granted under an LLC agreement. It also is useful as a reminder that a mere...more

Five Things to Think About Before a Surprise SEC Exam

If a team from the SEC arrives at your office and says, “We are conducting an on-site examination and would like to talk to the CCO right now,” are you prepared? A handful of registered investment advisers have faced surprise...more

Delaware Court of Chancery Rejects Lawyer-Driven Stockholder Books and Records Demand in Wilkinson v. Schulman

by Polsinelli on

Stockholder books and records demands are investigatory tools that often are a prelude to litigation directed at corporate fiduciaries. In rejecting a stockholder books and records demand, the Delaware Court of Chancery...more

Franchise Tax Board Penalties: Accuracy-Related Penalties, Part III: Substantial Misstatements

by Moskowitz LLP on

We continue our discussion of Franchise Tax Board (FTB) accuracy-related penalties with penalties relating to substantial understatements or misstatements of income and asset values....more

Franchise Tax Board Penalties: Accuracy-Related Penalties, Part II: Negligence

by Moskowitz LLP on

The penalties for negligent errors on your tax return can be high, but they pale in comparison to those imposed if the government (federal and/or state) concludes that your mistakes were intentional. In this post, we are...more

Court Of Chancery Expands MFW To Recapitalization

by Morris James LLP on

IRA Trust FBO Bobbie Ahmed v. Crane, C.A.. 12742-CB (December 11, 2017) - This is an important decision because it extends the holding of MFW to a stock reclassification. Under the 6-part test of MFW, the business judgment...more

Court Of Chancery Explains Basis For Inspection Of Alleged Wrongdoing

by Morris James LLP on

Silverberg v. ATC Healthcare Inc., C.A. 2017-0242-JRS (December 5, 2017) - While the standard to win the right to inspect corporate records to investigate alleged wrongdoing is a lenient one, it is still not enough to just...more

SEC Brings Enforcement Action for Inadequately Documented Perks but Does Not Impose Penalty

The SEC charged a biopharmaceutical company with committing a series of accounting controls and disclosure violations, including the failure to properly report as compensation millions of dollars in perks provided to its...more

Finding No Credible Basis For Inferring Wrongdoing, Delaware Court Of Chancery Denies Demand for Books And Records Concerning...

by Shearman & Sterling LLP on

On December 5, 2017, Vice Chancellor Joseph R. Slights III of the Delaware Court of Chancery denied a motion for reargument concerning the Court’s rejection of a shareholder’s demand to inspect documents pertaining to alleged...more

What’s The Deal With Branch Office Inspections?

by Fox Rothschild LLP on

In Notice to Members 17-38, FINRA has put out for comment a change to Rule 3110 that would allow the remote inspection of certain “qualifying offices” as that term is defined by FINRA. In its Notice to Members, FINRA...more

Court of Chancery Addresses the Effect of Corwin and Garner in the Section 220 Context

Since its issuance in 2015, the Delaware Supreme Court’s decision in Corwin v. KKR Financial Holdings LLC has been routinely applied, in appropriate circumstances, to dismiss post-closing deal litigation. However, Corwin’s...more

Delaware Court Of Chancery Rejects Books-And-Records Demand Driven By Entrepreneurial Counsel

by Shearman & Sterling LLP on

On November 13, 2017, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery rejected a stockholder’s demand to inspect books and records of A. Shulman, Inc. (the “Company”) under Delaware General Corporation Law...more

Can the Bare Naked Assignee Demand Access to LLC Records?

by Farrell Fritz, P.C. on

I wish I could take credit for it, but I can’t. The phrase “bare naked assignee” was coined by the preeminent scholar and LLC maven Professor Daniel Kleinberger whose massive oeuvre (not to mention his guest posts on this...more

“Lawyer Driven” Books and Records Demand Rejected by the Delaware Court of Chancery

by Reed Smith on

The Delaware Court of Chancery rejects the ability for stockholders to access a corporation’s books and records based on “lawyer driven” motives. A recent decision of the Delaware Court of Chancery, Wilkinson v. A....more

Section 220 Demand Denied In Lawyer-Driven Litigation

by Fox Rothschild LLP on

In the recent decision of Wilkinson v. Schulman, C.A. No. 2017-0138-VCL (Del. Ch. Nov. 13, 2017), the Court of Chancery denied a Section 220 books and records demand on the basis that even though the demand stated a “proper...more

Court Of Chancery Rejects Attorney-Driven Books And Records Demand

by Morris James LLP on

Wilkinson v. A. Schulman, Inc., C.A. No. 2017-0138-VCL (Nov. 13, 2017) - This decision has potential far-reaching consequences for shareholder-plaintiff litigation. As is well known, some entrepreneurial plaintiff-side...more

Delaware Court of Chancery Rejects "Lawyer-Driven" Section 220 Demand

On November 13, 2017, the Delaware Court of Chancery issued a short but potentially important opinion in Jack Wilkinson v. A. Schulman, Inc., an action to inspect books and records brought under Section 220 of the Delaware...more

Rethinking Independence in Internal Investigations

by Farella Braun + Martel LLP on

For a company under actual or potential government scrutiny, an independent internal investigation performed by outside counsel, sometimes coupled with cooperation with the government, can mean the difference between...more

Lawyers Beware: Battle of Legal Professional Privilege of Internal Investigation Continues in England and Wales

Last month, the Court of Appeal of England and Wales granted permission for Eurasian Natural Resources Corp. Ltd. (“ENRC”) to appeal the May 2017 decision by the High Court relating to a dispute over the legal professional...more

SEC's Office of Compliance Inspections and Examinations Issues Risk Alert for Municipal Advisors

by Bracewell LLP on

On November 7, 2017, the Office of Compliance Inspections and Examinations (“OCIE”) of the U.S. Securities and Exchange Commission (“SEC”) issued a risk alert that described the staff’s observations from over 110 examinations...more

Company, Officers Litigating Financial Fraud Action With SEC

by Dorsey & Whitney LLP on

While retail customers and cyber may be key areas for a refocused SEC enforcement program, financial fraud remains a critical and important area of concentration. This focus is will illustrated by the recent action filed...more

Chancery Approves Incorporation of Reference Condition in Section 220 Litigation

by Morris James LLP on

Books and records actions are heralded as the “tools at hand” for litigators pursuing shareholder claims against a corporation. In fact, the Delaware Court of Chancery has been critical of litigants who failed to take...more

Factors to take into account when dealing with a request to inspect a company's register of members

by Dentons on

The Court of Appeal has considered two issues regarding a request to inspect a company's register of members. First, whether a request is valid if it does not contain all the information required by the Companies Act 2006...more

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