"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.
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