Delaware Business Litigation Report

Delaware Business Litigation Report

Category Archives: Books and Records

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Master Denies Limits On Trading Following Inspection

Posted in Books and Records
Southpaw Credit Opportunity Master Fund LP v. Advanced Battery Technologies Inc,. C.A. 9542-ML (February 26, 2015) A Master holds that the Court should not impose trading restrictions after a books and records inspection but should impose a confidentiality provision. Also interesting, the Master rejected the claim that China law prohibited inspection of a Delaware corporation’s [&hellip… Continue Reading

Court Of Chancery Explains Inspection Rights For Subsidiary Wrongdoing

Posted in Books and Records
Oklahoma Firefighters Pension & Retirement System v. Citigroup Inc., C.A. 9587-ML (September 30, 2014) This decision explains when wrongful conduct at a subsidiary is sufficient to warrant inspection of the parent’s records to determine if the parent has violated any Caremark duties.  At least when there is some basis to infer that the parent had oversight [&hellip… Continue Reading

Court Of Chancery Permits Interlocutory Appeal In 220 Case

Posted in Books and Records
In Re Freeport-McMoRan Copper & Gold Inc. Derivative Litigation,  C.A. 8145-VCN (February 14, 2013) In recent years, the Delaware Supreme Court has stressed that it is desirable to file a books and records case before starting derivative litigation.  But do you need to do that every time?  In the unusual situation presented by this case, the [&hellip… Continue Reading

Court Of Chancery Explains Scope Of Inspection

Posted in Books and Records
Rock Solid Gelt, Ltd. v. The SmartPill Corporation,  C.A. 7100-VCN (October 10, 2012) This decision addresses one of the more perplexing problems of book and records litigation – what exactly is the plaintiff entitled to review? The Court of Chancery expects plaintiffs to limit their demands to what is really necessary and to explain to the Court, [&hellip… Continue Reading

Court Of Chancery Explains Sufficient Basis For Inspection

Posted in Books and Records
Louisiana Municipal Police Employees’ Retirement System v. Lennar Corporation, C.A. 7314-VCG (October 5, 2012) To inspect corporate records to see if there has been "wrongdoing,"  a stockholder has to have a basis to suspect that wrongdoing has occurred. The evidence needed has been described as the lowest level possible if there is to be any standard [&hellip… Continue Reading

Court Of Chancery Appoints Books And Records Receiver

Posted in Books and Records
Jagodzinski v. Silicon Valley Innovation Company LLC, C.A. 6203-VCP  (February 14, 2012) This is an interesting decision because the Court appointed a receiver to enforce its orders granting a right to inspect an LLC’s records when the LLC management did not comply with those past orders.  How far that receiver might go in his inspection is [&hellip… Continue Reading

Supreme Court Clarifies Inspection Rights

Posted in Books and Records
Espinoza v. Hewlett-Packard Company, C.A. 208, 2011 (November 21, 2011) This decision clarifies the scope of the right to inspect a company’s records to investigate allegations of wrongdoing.  The decision is somewhat unique because it also raised issues of attorney-client privilege and work product protection that the Supreme Court did not need to decide. Briefly, a [&hellip… Continue Reading

Court Of Chancery Explains Books And Records Rights In An LLC

Posted in Books and Records
DFG Wire Company LLC v. Eight Estates Wine Holdings LLC, C.A. 6110-VCN (August 31, 2011) Inspection rights in LLCs are different from those in corporations.  The statute is different and the relationship between the owners is different.  This decision does a good job of explaining inspection rights in an LLC, including when those rights may reach [&hellip… Continue Reading

Court Of Chancery Explains Right To Inspect After Demand Refused

Posted in Books and Records
Louisiana Municipal Police Employees Retirement System v. Morgan Stanley & Co. Inc., C.A. 5682-VCL (March 4, 2011) This decision explains why a stockholder is entitled to inspect the documents surrounding a corporation’s refusal to pursue derivative litigation when the board appears independent enough to be able to properly refuse the demand to sue.  The Court [&hellip… Continue Reading

Supreme Court Upholds Late Inspection Suit

Posted in Books and Records
King v. Verifone Holdings Inc.,  No. 330, 2010  (January 28, 2011) This decision reinstates a books and records case that was dismissed by the Court of Chancery. The Court of Chancery held that a stockholder who first files a derivative complaint may not later file a books and records case.  The Supreme Court overturned that [&hellip… Continue Reading