Court of Chancery Imposes Incorporation By Reference Condition On Books and Records Production
The City Of Cambridge Retirement System v. Universal Health Services Inc., C.A. No. 2017-0322-SG (Oct. 12, 2017)
A stockholder may inspect a corporation’s records for any recognized proper purpose, including investigating alleged mismanagement. If that stockholder later files a complaint based on the records produced, must the stockholder agree that any reviewing court may consider all those records in ruling on a motion to dismiss rather than being limited to the complaint’s allegations? Under this decision, and a similar decision in the Yahoo! litigation, yes, potentially. While this decision notes that such a condition is within the Court’s discretion, the language of the opinion suggests that condition will be granted as a matter of course.