In the recent decision of Oklahoma Firefighters Pension and Retirement System v.
Plaintiff filed its demand under 8 Del. C. § 220 to inspect Amazon's books and records to examine potential corporate mismanagement and determine the independence and disinterestedness of Amazon's directors. The demand sought nineteen different categories of documents spanning eleven years. Although Amazon questioned the legitimacy of Plaintiff's purpose, it agreed to produce a targeted set of responsive materials, including relevant Board or committee meeting minutes and redacting any non-responsive content. Plaintiff, in turn, filed this litigation to demand production of all documents responsive to its Section 220 demand.
The Court found that Plaintiff had not, as a threshold matter, stated a proper purpose for its investigation. First, Plaintiff's reference to closed or pending investigations and litigation failed to establish a credible basis for its desire to investigate possible mismanagement at Amazon. The investigations and litigation had either closed without any adverse findings or were pending, and the only evidence of wrongdoing-a fine issued to Amazon from
Perhaps more importantly, though, the
Key Takeaway: When issuing a Section 220 demand to inspect corporate books and records, a plaintiff should first heed this Court's decision by including a proper purpose for its investigation with a credible basis for the suspected misconduct. Additionally, the responding company may be able to restrict its production to only those board and committee minutes that are relevant to the plaintiff's stated purpose for inspection.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Mr
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