Tag Archives: “section 220”

Mid-Year Review of Key Delaware Corporate and Commercial Decisions

Over the last 14 years that I have published this blog, I have compiled an annual review with a list of key Delaware corporate and commercial decisions that have widespread utility to practitioners, especially those court decisions that are not widely covered by other legal publications or the mainstream press. On a few occasions, I have prepared a mid-year … Continue Reading

Chancery Denies Request for Books and Records of Hewlett-Packard

Cook v. Hewlett-Packard Co., C.A. No. 8667-VCG (Del. Ch. Jan. 24, 2014)(revised Jan. 30, 2014). Issue Addressed: Was a stockholder entitled to additional books and records from Hewlett-Packard regarding accounting fraud at a company HP purchased? Answer: No Short Highlights This post-trial letter opinion from the Court of Chancery denying a request for books and … Continue Reading

Chancery Rejects Stockholder Demand to Hershey for Books and Records

Louisiana Municipal Police Employees’ Retirement System v. Hershey Co., No. 7996, Master’s Report (Del. Ch. Aug. 16, 2013). This decision rejected a demand for books and records of the Hershey Company based on DGCL Section 220. The stockholder claimed, in essence, that Hershey’s management must be complicit in the abhorrent child labor practices in the two West … Continue Reading

BJR Protected Allegedly Interested Director Transaction; When Section 220 Tolls Statute of Limitations

Sutherland v. Sutherland, C.A. No. 2399-VCN (Del. Ch. May 30, 2013). Issue Addressed:  Whether certain directors violated their fiduciary duties by benefiting from a system of charging for administrative expenses for personal matters that was more favorable to certain directors. Short Answer:  No. Background: Many prior Delaware decisions in this long-running internecine family business dispute have … Continue Reading

Supreme Court Reverses Chancery on Collateral Estoppel/Demand Futility and Section 220 Issues

Pyott v. Louisiana Municipal Police Employees’ Retirement System, No. 380, 2012 (Del. Supr., April 4, 2013) Issues Addressed:  (1) Whether or not a prior ruling by a California court dismissing a derivative suit served as a bar to subsequent Delaware derivative suits; and (2) Whether the failure to use Section 220 before filing suit created a … Continue Reading

Chancery Addresses Section 220 Issues

Doerler v. American Cash Exchange, Inc., C.A. No. 7640-VCG (Del. Ch. Feb. 19, 2013). This gem of a Chancery decision provides an excellent overview of both the basic prerequisites of a claim for books and records under DGCL Section 220 as well as the nuances of certain defenses that may be–and may not be available … Continue Reading

Our Section 220 Law Review Article Made the Top 10 List This Week

The law review article we wrote recently on Section 220 of the Delaware General Corporation Law (DGCL), regarding the right of shareholders to books and records of a corporation, reached the Top 10 list of most downloaded articles on corporate governance from SSRN (which is a repository where one can find virtually all law review articles published in … Continue Reading

Court Grants in Part and Denies in Part Requests for Books and Records Regarding Valuation and Breach of Fiduciary Duty

Rock Solid Gelt Ltd. v. The SmartPill Corp., C.A. No. 7100-VCN (Del. Ch. Oct. 10, 2012). Issue Presented: Whether a request for books and records was overly broad in connection with information sought to value one’s interests in a closely held company. Short Answer:Yes. Background This case involved an investment by Rock Solid in The SmartPill Corporation.  Its … Continue Reading

Court Rejects Request for Books and Records Sought to Investigate Caremark Claim

Louisiana Municipal Police Employees’ Retirement System v. Lennar Corp., C.A. No. 7314-VCG (Del. Ch. Oct. 5, 2012). Issue Presented: Whether newspaper articles announcing a federal investigation of the company, together with prior lawsuits that were settled without an admission of fault, satisfy the requisite threshold of “some evidence” to establish a credible basis of wrongdoing … Continue Reading

Chancery Finds Inadequate Representation by Derivative Plaintiff; Dismisses Complaint with Prejudice

South v. Baker, C.A. No. 7294-VCL (Del. Ch. Sept. 25, 2012). Issues Addressed: This decision is a candidate for inclusion in the pantheon of iconic Delaware Court of Chancery opinions addressing the following issues:  (1) When derivative plaintiffs and their counsel will be presumptively found to provide inadequate representation resulting in the complaint’s dismissal with … Continue Reading

Dismissal of One Derivative Lawsuit Not Bar to Second Derivative Claim by Second Stockholder

Louisiana Municipal Police Employees’ Retirement Systems v. Pyott, C.A. 5795-VCL (Del. Ch. June 11, 2012). Issues Addressed Whether collateral estoppel, Rule 23.1 or Rule 12(b)(6) apply to require the dismissal of a Delaware derivative suit based on the dismissal in California of a related derivative suit in which a federal court granted a Rule 23.1 … Continue Reading

Supreme Court Affirms Chancery Decision in Fundamental Section 220 Ruling

Central Laborers Pension Fund v. News Corp., No. 682, 2011 (Del. May 29, 2012). Issue Raised on Appeal: Whether one can satisfy the proper purpose requirement of DGCL section 220 when a derivative action is filed simultaneously with the section 220 action. Short Answer: The Delaware Supreme Court declined to address the issue and instead … Continue Reading

Inspecting Corporate ‘Books and Records’ in a Digital World: The Role of Electronically Stored Information

Inspecting Corporate Books and Records in a Digital World: The Role of Electronically Stored Information is the title of the latest law review article that I co-authored with Kevin Brady. A former associate also joined us as a co-author. The article will appear in The Delaware Journal of Corporate Law in the issue distributed this month in hard copy, which … Continue Reading

Key Delaware Corporate and Commercial Decisions in First 4 Months of 2012

The following key Delaware corporate and commercial decisions from the first four months of 2012 are a follow-up to our summary of the key decisions that we featured from 2011. We highlight on these pages all the corporate and commercial opinions from Delaware’s Supreme Court and Court of Chancery, and we have chosen the following 2012 rulings … Continue Reading

Chancery Denies Motion to Compel Supplemental Section 220 Production Due to Post-Trial Developments

Amalgamated Bank v. NetApp, Inc., C.A. No. 6772-VCG (Del. Ch. Feb. 6, 2012). Issue Addressed Whether supplemental documents should be produced to comply with post-trial determination pursuant to DGCL Section 220 that books and records must be provided. Background In October 2010, the plaintiff in this case filed a stockholder derivative action in California based on … Continue Reading

Chancery Grants Records Under Section 220 Despite Pending Federal Securities Suit

Paul v. China MediaExpress Holding, Inc., C.A. No. 6570-VCP (Del. Ch. Jan. 5, 2012), read opinion here. Issues Addressed (1) Whether a Section 220 case should be stayed pending  the outcome of a related federal securities suit; and (2) Whether the shareholder in this case established a proper purpose to inspect books and records under DGCL Section 220.  Short … Continue Reading

Noteworthy 2011 Corporate and Commercial Decisions from Delaware’s Supreme Court and Court of Chancery

Noteworthy 2011 Corporate and Commercial Decisions from Delaware’s Supreme Court and Court of Chancery. By:  Francis G.X. Pileggi and Kevin F. Brady. Introduction This is the seventh year that we are providing an annual review of key Delaware corporate and commercial decisions. During 2011, we reviewed and summarized approximately 200 decisions from Delaware’s Supreme Court … Continue Reading