Main Menu

Court of Chancery Limits Inspection For Proxy Battle

Pershing Square L.P. v. Ceridian Corporation, C.A. No. 2780-CC (Del. Ch. May 11, 2007).

To obtain inspection of corporate records, a stockholder must show that her purpose is a proper one. This decision holds that determining the suitability of a candidate to serve as a director is a proper purpose. That much is no surprise.

What is potentially more significant is the Court's other holding. This decision protects confidential business information from being used in a proxy contest, at least when the relevance of the confidential materials to the election seems strained. The Court was clearly concerned about discouraging frank communication to the board.

The plaintiff did not help itself by having a secret meeting with a corporate officer in a successful attempt to gain corporate information to use in the proxy contest. This sort of disloyalty is disfavored by the Courts. Share
Back to Page