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The boundary of “proper purpose” for corporate books and records review in Delaware

Considering the “murky legal landscape” surrounding a stockholder’s statutory right to demand inspection of a corporation’s books and records, the Delaware Court of Chancery recently decided that searching for support for a shareholder’s complaints about the board’s deal-making decisions as part of a proxy contest is not a “proper purpose”; however, the court left open the possibility that a proxy contest could serve as a proper purpose if the shareholder could present credible evidence of questionable transactions.

Read the article here.

Category: Corporate Governance, Mergers & Acquisitions