K. Tyler O'Connell of Morris James. Court Clarifies When Books and Records Requests to Investigate Wrongdoing or Mismanagement Have a 'Proper Purpose'
Section 220 of the Delaware General Corporation Law permits a stockholder to inspect corporate books and records for a "proper purpose" reasonably related to her interests as a stockholder.
December 16, 2020 at 09:00 AM
6 minute read
Section 220 of the Delaware General Corporation Law permits a stockholder to inspect corporate books and records for a "proper purpose" reasonably related to her interests as a stockholder. In AmerisourceBergen v. Lebanon County Employees' Retirement Fund, __ A.3d __, 2020 WL 7266362 (Del. Dec. 10, 2020), the Delaware Supreme Court held that a stockholder who has a "credible basis" to investigate potential wrongdoing or mismanagement need not identify a specific intended use or "end" for the information requested. In addition, the court clarified that a stockholder need not show, as a matter of law, that the potential wrongdoing is actionable. Rather, a "credible basis" to suspect possible wrongdoing or mismanagement is sufficient.
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