Information

Question 1

What are the main reasons for requesting information?

Answer 1

○ Potential shareholder litigation: best way to get info so you can plead sufficient facts

○ For a proxy contest, gaining access to documents to help round up support from other directors.

Question 2

What are the bare minimum for books & records?

Answer 2

Certificate of incorporation, Bylaws, Minutes of board & SH meetings, & Board or SH actions by written consent

Question 3

A request for just the certificate of incorporation…

Answer 3

Would likely be denied because they are publically available

Question 4

What is the standard for an information request?

Answer 4

A request to access such records must be very narrowly tailored (a DE standard)

Question 5

What is a stockholder under DE 220?

Answer 5

a holder of record of stock in a corporation or a person who is the beneficial owner of the shares

Question 6

What are a stockholder’s rights under DE 220

Answer 6

the right to inspect for any proper purpose, and to make copies and extracts from … corporation’s stock ledger, a list of its stockholders, and its other books and records.

Question 7

What is a proper purpose under DE 220?

Answer 7

a purpose reasonably related to such person’s interest as a stockholder

Question 8

What is the minority position as to proper purpose? (Honeywell)

Answer 8

A proper purpose needs to be related to investment returns

Question 9

Elements of Proxy Fraud

Answer 9

1) A false or misleading statement, of material fact, upon which shareholder voters relied on.
2) the statement caused them to suffer a loss
3) culpability of the fraudulent shareholder (intent to mislead or defraud)

Question 10

does a holder of short stock have an inspection right?

Answer 10

Yes, so long as they also have long stock. Court hasn’t spoken on what happens if they only have short stock.