806 A.2d 113
-Plaintiff shareholder's derivative action against defendant corporation alleged its directors breached fiduciary duties in connection with a consummated stock-for-stock merger with a target corporation.
-The Delaware Court of Chancery in and for New Castle County decided to limit the shareholder's Del. Code Ann. tit. 8, § 220 demanded investigation of the corporation's books and records.
-The shareholder made an interlocutory appeal.
-The P brought a stockholder’s derivative suit to examine the Defendant's conduct with regard to certain accounting irregularities.
-P wished to investigate wrongdoing that may have occurred prior to his stock ownership.
-P sought to examine documents the corporation had obtained from financial and accounting advisors and documents of its subsidiary in order to understand what the company’s directors knew and why they failed to recognize the accounting irregularities.
-A stockholder may access records that predate the purchase of a stockholder’s interest. It should not be used as an automatic cut off date.
-Stockholders of a parent corporation are entitled to inspect a subsidiary’s books and records only after establishing fraud or that the subsidiary is actually the alter-ego of the parent.
-The supreme court reversed the decision and allowed inspection of records reasonably related to the proper purpose (1) before the date the shareholder acquired his shares, (2) irrespective of the source of the records, and (3) given to the corporation by the target before or after the merger, and otherwise affirmed the decision.
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