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Can a tweet really provide the basis for a shareholder’s records demand?

In their recent article for Bloomberg Law, Tod Northman and Daniel Schiau analyze a Tesla stockholder’s request for corporate books and records spawning out of Tesla CEO Elon Musk’s Twitter activities, over which the stockholder alleges Tesla’s Board of Directors did not exercise sufficient control. Tod and Daniel’s commentary suggests that Tesla’s actions in response to the request may have enhanced the stockholder’s claims to review the books and records. The case, which is pending in the Delaware Court of Chancery, appears to be a straightforward application of the common law “necessary and essential” test weighing in favor of disclosure.

Read the article here.

Category: Corporate Governance