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Section 220/Inspection Rights

18 December 2020

Sharpening The “Tools At Hand”: Delaware Supreme Court Holds Stockholders May Access Books And Records Without Proof Of An Actionable Future Claim

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The Delaware Supreme Court recently affirmed Vice Chancellor Laster’s decision requiring the production of corporate books and records in an action some have characterized as expanding the scope of Section 220 actions.  These decisions, however, largely affirm the long-standing statutory mandate that a requesting stockholder must state a “proper purpose” for inspection (not what the stockholder intends to do with the resulting records) and confirm that a stockholder investigating potential wrongdoing need not prove it has actionable claims in order to proceed.

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