Friday, November 22, 2013

Thomas & Betts Corporation v. Leviton Manufacturing Co., Inc. case brief

Thomas & Betts Corporation v. Leviton Manufacturing Co., Inc. case brief summary
681 A.2d 1026 (1996)


CASE SYNOPSIS
Plaintiff stockholder, a corporation, sought review of an order of the Court of Chancery of the State of Delaware in and for New Castle County, which granted in part and denied in part its request for inspection of certain books and records of defendant company.

CASE FACTS
The stockholder purchased a 29.1 percent interest in the company in order to force a sale of the company to the stockholder. The stockholder then filed an action seeking to compel inspection of the company's books and records pursuant to Del. Code Ann. tit. 8, § 220. The trial court denied the request in part and limited the stockholder's entitlement to inspection of books and records and the stockholder sought review.

DISCUSSION

  • The court affirmed because, based upon legal and credibility assessments, the stockholder failed to provide specific and credible evidence sufficient to warrant a suspicion of waste and mismanagement, and so failed to satisfy its burden of showing a proper purpose for inspection. 
  • The stockholder's primary purpose for inspection was to further its plans for acquiring the company, which was antithetical to the interests of the corporation.

CONCLUSION
The order of the trial court was affirmed.


Recommended Supplements for Corporations and Business Associations Law

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