Delaware Business Litigation Report

Court Of Chancery Explains Inspection Rights In An LLC

RED Capital Investment L.P.  v. RED Partner LLC, C.A. 11575-VCN (February 11, 2016)

This is an interesting decision because it explains inspection rights in the LLC context under the two different standards set out in Section 18-305(a) and (b) of the LLC Act. As expected, it is better to seek inspection as a manager than as a member.  Managers have similar “unfettered” access to company books and records as corporate directors, absent restrictions in the LLC agreement.  Also notable, inspection rights may include the books and records of subsidiaries, under the right circumstances.  

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