"Credible Basis" to Investigate Mismanagement: Developments in § 220 Books-and-Records Inspections

Jones Day partners Mike McConnell and Marjorie Duffy authored an article on shareholder inspection of books and records, which was published in the October 2020 edition of The Review of Banking & Financial Services. Under Section 220 of the Delaware General Corporation Law, stockholders of Delaware corporations seeking to inspect corporate books and records must show a "proper purpose."Where the purpose is to investigate alleged or suspected wrongdoing, a stockholder must establish a "credible basis" from which wrongdoing may be inferred. In this article, the authors provide an overview of the general requirements of the statute, and then offer a detailed discussion of recent applications by the Delaware courts of the credible-basis standard. Read the article here.

Reprinted with permission from the October 2020 edition of The Review of Banking & Financial Services. ©2020 RSCR Publications LLC. Further duplication without permission is prohibited. All rights reserved.

Insights by Jones Day should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information purposes only and may not be quoted or referred to in any other publication or proceeding without the prior written consent of the Firm, to be given or withheld at our discretion. To request permission to reprint or reuse any of our Insights, please use our “Contact Us” form, which can be found on our website at This Insight is not intended to create, and neither publication nor receipt of it constitutes, an attorney-client relationship. The views set forth herein are the personal views of the authors and do not necessarily reflect those of the Firm.