The Delaware Court of Chancery on Monday dismissed a books-and-records suit against plastics supplier A. Schulman Inc., finding that the plaintiff's Levi & Korsinsky attorneys—and not their client—were the force behind the suit.

In an eight-page memorandum opinion, Vice Chancellor J. Travis Laster ruled that Schulman stockholder Jack Wilkinson had simply “lent his name” to the Section 220 action, which sought corporate documents related to $3.9 million in performance awards paid to Schulman's former president and CEO after he retired in 2014.

While the complaint appeared to state a valid purpose to open the company's books, Laster said, Wilkinson admitted in a deposition that he knew very little about the details of the demand. Rather, Levi & Korsinsky, which has represented Wilkinson in at least seven lawsuits, had pursued the case for reasons drastically different from those of its clients.

“In this case, the trial record established that the purposes for the inspection belonged to Wilkinson's counsel, L&K, and not to Wilkinson himself,” Laster wrote. “Wilkinson simply lent his name to a lawyer-driven effort by entrepreneurial plaintiffs' counsel.”

An attorney from Levi & Korsinsky did not immediately return a call Monday morning seeking comment on the case.

According to Laster's opinion, Levi & Korsinsky sent a demand to Schulman last summer on behalf of Wilkinson, seeking to inspect documents involving a decision by the Schulman board to accelerate the vesting of 111,365 shares of restricted stock belonging to Joseph M. Gingo, upon the former CEO's resignation in December 2014.

The accelerated vesting, court documents showed, had caused another 107,775 shares to vest along with them, costing the company more than $3.9 million and favorable tax treatment under the Internal Revenue Code. According to the demand, Gingo had already been compensated for his past service to the company, and there was a credible basis to suspect that the additional acceleration could be attacked as corporate waste.

Wilkinson filed suit in February, after Schulman rejected the demand, and Wilkinson was later deposed.

However, Wilkinson testified that he was unhappy with Schulman's recent performance and decided to pursue a books-and-records inspection after the company announced negative financial results. Wilkinson said in his testimony that it was Levi & Korsinsky's idea to investigate the decision to accelerate Gingo's equity awards, and the firm had developed each of the purposes in the demand letter, according to Laster's opinion, which cites extensively to Wilkinson's deposition.

Laster said the deposition revealed that Levi & Korsinsky had prepared the complaint and contacted Wilkinson only to obtain his signature on the verification. Wilkinson, the judge said, did not take any steps to confirm the accuracy of the allegations and simply verified the pleading in reliance on counsel.

According to Laster's opinion, Wilkinson offered no explanations for the suit, and he was unable to recall any discussions with his attorneys regarding Schulman's response to the book-and-records demand.

“A stockholder seeking an inspection and retaining counsel to carry out the stockholder's wishes is fundamentally different than having an entrepreneurial law firm initiate the process, draft a demand to investigate different issues than what motivated the stockholder to respond to the law firm's solicitation, and then pursue the inspection and litigate with only minor and non-substantive involvement from the ostensible stockholder principal,” Laster said dismissing the suit for failing to state a proper purpose.

“On the record presented in this case, the company proved that Wilkinson's purported purposes were not his actual purposes. They were his counsel's purposes.”

There have been no sanctions levied in the case, and attorneys for Schulman did not provide comment Monday on the case or whether they planned to move for attorney fees.

Wilkinson was represented by Amy Miller and Christopher J. Kupka of Levi & Korsinsky and Michael Van Gorder of Faruqi & Faruqi.

Schulman was represented by Anthony J. O'Malley of Vorys, Sater, Seymour and Pease and Stephen C. Norman and Tyler J. Leavengood of Potter Anderson & Corroon.

The case was captioned Wilkinson v. A. Schulman.