Delaware Business Litigation Report

Delaware Business Litigation Report

Category Archives: Books and Records

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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 … Continue Reading

Court Of Chancery Explains Scope Of Inspecton

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, … 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 … 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 becasue it also raised issues of attorney-client privilege and work product protection that the Supreme Court did not need to decide. Briefly, a … 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 … 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 … 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 … Continue Reading

Court Of Chancery Explains Expedited Procedures

Posted in Books and Records
Lavi v. Wideawake Deathrow Entertainment LLC, C.A. 5779-VCS (January 18, 2011) The Delaware corporate and alternative entity laws have several provisions for expedited treatment of corporate disputes, such as over the right to inspect corporate records. Those matters are to go to trial quickly and, as this decision explains, are seldom subject to motion practice … Continue Reading