Delaware Business Litigation Report

Court of Chancery Outlines Proof Sufficient for Books and Records Inspection and Permits Inspection of Emails

Mudrick Capital Management LP v. Globalstar Inc., C.A. No. 2018-0351-TMR (Del. Ch. July 30, 2018)

This decision reflects a good example of how summary books and records actions often proceed in the Court of Chancery: the parties typically work to narrow the issues for trial; the defendant often moots less objectionable records requests, many times in the weeks or days leading to trial; and the plaintiff often narrows disputed requests shortly before trial.  Here, the parties did all the above.  The petitioner thereafter carefully marshaled its evidence and showed why it should be permitted to inspect emails and other materials that are sometimes off limits in books and records actions. As the Court put it regarding email inspection, the petitioner established that “(1) the produced documents do not allow it to adequately address the stated purposes, and (2) the produced documents also suggest that other documents exist, including emails, that address the crux of the stated purposes and are unavailable from another source.”

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