220 Actions and Tools at Hand | Brian JM Quinn | February 22, 2013

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220 Actions and Tools at Hand

by Brian JM Quinn Show/Hide

Shareholders have a statutory right to access the books and records of the corporation. This power is an extremely important tool for shareholders to monitor the actions the board of directors and to root wrong-doing or malfeasance. However, the right to monitor a corporation's books and records is also subject to limitations. In the following cases we learn about using the “tools at hand” and the limits to their use.

Courts – as in Beam v. Stewart – regularly exhort plaintiffs to use Section 220 to seek out books and records prior to filing derivative complaints.  However, the 220 process can be lengthy.  Consequently, the economics of plaintiff litigation make it difficult for plaintiffs to both pursue 220 litigation and also maintain control positions in early filed derivative litigation. This challenge makes 220 actions a less than perfect vehicle for curbing the excesses of the litigation industrial complex. 

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  1. 1 Show/Hide More DGCL Sec. 220
    Original Creator: Brian JM Quinn
    Inspection of Books and Records
  2. 2 Show/Hide More Seinfeld v. Verizon Communications Inc.
    Original Creator: Brian JM Quinn
    Sec 220 – stockholder inspection rights
  3. 3 Show/Hide More LAMPERS v Lennar Corp
    Original Creator: Brian JM Quinn
    What are the standards for a 220 books and records action? PL must have a proper purpose and a credible basis for believing further investigation will uncover mismanagement
  4. 4 Show/Hide More Louisiana Municipal Police Employees Retirement System v. Morgan Stanley
    Original Creator: Brian JM Quinn
    Using 220 books and records demand to build facts to support derivative litigation. Also, the role of litigation demand and demand refusal.
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July 07, 2015

corporate dgcl litigation

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