Molly DiBianca of Clark Hill. Courtesy photo Difference in Political Beliefs Is Not a Proper Purpose for Section 220 Action
The right of a shareholder to demand to inspect a company's books and records may be an important tool but it is not without limits. In a recent decision involving The Walt Disney Co. (Disney), the Delaware Court of Chancery reminded one litigant that disagreement over business decisions, including decisions about a company's position on social issues, is not a proper basis for a shareholder action under Section 220.
July 26, 2023 at 09:00 AM
5 minute read
Contributors
The right of a shareholder to demand to inspect a company's books and records may be an important tool but it is not without limits. In a recent decision involving The Walt Disney Co. (Disney), the Delaware Court of Chancery reminded one litigant that disagreement over business decisions, including decisions about a company's position on social issues, is not a proper basis for a shareholder action under Section 220.
Background
On Feb. 24, 2022, the Florida House of Representatives voted to approve the Parental Rights In Education Act (HB 1557). HB 1557 restricts the ability of teachers to discuss certain topics related to sexual orientation and gender identity. Disney did not take a public position on the bill prior to its passage by the House and received significant criticism for its silence from its employees. The Florida Senate passed HB 1557 on March 8, 2022, and the bill was sent to the governor for signature.
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