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Summaries and analysis of recent Delaware court decisions concerning business-related litigation.

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Showing one post in Proxy Contest.

Chancery Declines to Establish New Rule Concerning Books and Records Inspections Related to Proxy Contests

Posted In Books and Records, Chancery, Proxy Contest

High River Limited Partnership v. Occidental Petroleum Corp., C.A. No. 2019-0403-JRS (Del. Ch. Nov. 14, 2019).

Section 220 of the DGCL grants stockholders a qualified right to inspect corporate books and records “necessary and essential” to a “proper purpose.”  One recognized proper purpose is investigating potential corporate wrongdoing or mismanagement.  In such cases, the stockholder must establish a “credible basis” for the suspicion before the Court of Chancery will order inspection.  When a stockholder makes that showing, the Court has permitted use of the produced books and records to mount a proxy contest.  However, as the Court of Chancery observes in this decision, no Delaware court has compelled inspection “when the stockholder’s only stated purpose for inspection is a desire to communicate with other stockholders in furtherance of a potential proxy contest.”  And under the facts and circumstances of this case, the Court declines to be first.   More ›