Chicago Business Litigation Attorney Blog

A stockholder of a Delaware corporation, under 8 Del. C. § 220, has a statutory right to inspect the books and records of the corporation. Norfolk County Retirement System v. Jos. A. Bank Clothiers, Inc., 2009 WL 353746 (Del.Ch.) For a stockholder to obtain the books and records of the corporation they must have a proper purpose for the request. See id. Proper purpose, as defined by § 220, “is a purpose reasonably related to the plaintiff’s interest as a stockholder. See id. Delaware courts have recognized that investigating the possibility of pursuing a derivative action based on perceived wrongdoing by a corporation’s officers or directors represents a proper purpose for a § 220 demand. See id. However, the scope of documents available to a stockholder’s request under § 200 is limited. See id. Delaware courts repeatedly have held that “the scope of inspection should be circumscribed with precision and limited to those documents that are necessary, essential, and sufficient to the stockholder’s purpose.” See id.

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About Tamari & Blumenthal, LLC: Tamari & Blumenthal, LLC is a business litigation firm. Litigators Walid J. Tamari and Grant Blumenthal practice in the law firm's complex litigation practice group.