Actionable Claim to Inspect Books and Records
The Delaware Court of Chancery ordered the inspection of the company’s books and records in Lebanon County Employees’ Retirement Fund, et al. v. AmerisourceBergen Corporation. Michael Wolraich: Stockholders have a low burden of proof to show they are entitled to enforce their inspection rights under Delaware law.
Plaintiffs filed an action to enforce their right to inspect Amerisource’s books and records in order to determine whether the company committed fraud in connection with the distribution of opioids. The widespread opioid epidemic in the United States is well-known, and Amerisource has spent over $1 billion defending and settling opioid-related litigation.
In re Facebook, In re Facebook, In re Facebook, In re Facebook, In re Facebook, In re Facebook, In re Facebook, In re Facebook, In re Facebook, In re Facebook, In re Facebook, In re Facebook, In re Facebook, In re Facebook, In re Facebook, In re Facebook, In re Facebook, In re Facebook, In re Facebook, In re Facebook, In re Facebook, In re Facebook, In re
The Delaware Supreme Court declined to find the Demand deficient for failing to state the ends of plaintiffs’ investigation, observing that stockholders’ intentions can be relevant in this context. The Court rejected the notion that plaintiffs are required to provide evidence of an actionable agreement.
The Court determined that Amerisource improperly denied plaintiffs access to documents other than formal board minutes and materials, so the Court will allow discovery “to understand what books and records exist” beyond formal board minutes and materials. Stockholders may increasingly state broader purposes for investigations to limit the number of defenses that companies may assert.
What are the remedies and sanctions for enforcement of the right to inspect corporate books?
If a shareholder’s right to inspect the company’s books is denied, he or she can seek specific performance, a petition for mandamus, damages, or a criminal action (Associated Smelting and Refining Corp. vs. Lim).
When can shareholders inspect the records and bookkeeping of the corporation?
Shareholders have the right to inspect and copy any of the previously listed business records if they give the corporation written notice at least five business days before the date they want to inspect and copy them.
What books and business records are shareholders entitled to inspect or request for a copy?
Section 74 of the Corporation Code states that “the records of all business transactions of the corporation and the minutes of any meeting shall be open to inspection by any director, trustee, stockholder, or member of the corporation.”
Can a shareholder inspect corporate books?
Shareholders have the right to inspect bylaws, accounting books, records, minutes, and financial statements under California Corporations Code statutes, and the court has the authority to order the corporation to pay costs and fees if the failure to comply was done without adequate justification.
What documents can a shareholders entitled to see?
The company’s annual report and accounts are the most important documents for shareholders, and each shareholder has the right to receive a copy of any written resolution proposed by either the directors or the shareholders when they are issued generally and on request.
Can shareholders inspect books of accounts?
Shareholders have the right to examine the company’s financial books and records, which include financial statements, shareholder lists, corporate stock ledgers, and meeting minutes, among other things.
Are shareholders entitled to see full accounts?
Shareholders are entitled to receive and inspect copies of a company’s general financial records, but they are not entitled to receive or inspect copies of the company’s annual accounts and reports for each financial year.
Do shareholders have a right to see financial statements?
Shareholders have the following rights and responsibilities: receive a portion of the corporation’s profits (dividends); examine and copy corporate records, financial statements, and directors’ reports; and receive the corporation’s financial statements at least 21 days before each annual meeting.
Can a shareholder ask for an audit?
Even if your company is normally exempt from audits, you must have your accounts audited if shareholders who own at least 10% of the company’s shares (by number or value) request it. This can be an individual shareholder or a group of shareholders.
What books or records are required by law to be kept by a corporation?
A corporation’s books and records must include: 1. records of all business transactions; and 2. minutes books for meetings of stockholders or members, as well as the board of directors or trustees.
What are the books and records that are required to be kept by the corporation?
The following types of corporate books and records may be required of a corporation:
- Annual reports and financial statements.
- Articles of Incorporation and Amendments.
- Records of shareholder and director meetings, including adopted resolutions or actions taken.
Can stockholders access and examine a corporation’s books and records?
The director, trustee, stockholder, or member may inspect the corporate records in person or through a representative during reasonable business hours on business days, and may request copies of the records in writing and at his or her expense.
Who can inspect books of accounts?
During business hours, any director may inspect the books of accounts and other books and papers of the company, as defined in Section 2(12), which includes accounts, deeds, vouchers, writings, and documents.
Can shareholders inspect board minutes?
Minutes of Board and Committee Meetings A Director has the right to inspect the Minutes of Board and Committee Meetings held during his Directorship, even after he has ceased to be a Director; however, a member of the company has no right to inspect the Minutes of Board Meetings.
What is the right of inspection?
What is a Right of Inspection document? Typically, a Right of Inspection document gives directors a nearly absolute right to inspect corporate documents, while members or shareholders have a broad but limited right to inspect documents, and may be required to provide a valid reason before being granted access.