Subscribe- Plaintiff
- Highland Select Equity Fund, L.P.
- Represented By:
- Abrams, Kevin (Abrams & Bayliss LLP)
- Defense
- Motient Corporation
- Represented By:
- Guy , Ray (Weil Gotshal & Manges, LLP (DE))
Summary
Case Description:
A substantial stockholder of a Delaware corporation seeks access to the companys books and records pursuant to 8 Del. C. § 220, purportedly to investigate suspected mismanagement and for use in conjunction with an ongoing proxy contest. The demand letter spans 25 single-spaced pages and included 47 categories requiring the production of all books, records, documents, and correspondence in the Companys possession, custody, or control that constitute, identify, analyze, discuss, evaluate, consider or address a wide variety of issues. The corporation refused to comply with this demand. The stockholder filed suit on April 24, 2006, seeking an order requiring the corporation to provide it with the documents. The parties agreed to proceed on an expedited schedule, and the court held a one-day trial on June 2, 2006. On the eve of trial, following contentious and largely unproductive discovery proceedings, the stockholder revised its demand, although the revisions did little to narrow the breadth of the original request. The issue presented, after trial, was whether the stockholder made a proper demand or, instead, has presented such a sweeping and overbroad request as to constitute an impermissible use of the statutory right to inspect the corporations books and records.
Proceedings Description: On July 6, 2006, the Court of Chancery issued a Memorandum Opinion andOrder denying Highland Select Equity Fund, L.P. any relief on its complaintpursuant to Section 220(c) of the Delaware General Corporation Law demandingaccess to the books and records of Motient Corporation. Highland appealed thedecision to the Delaware Supreme Court.
Outcome: Following briefing and en bancargument, the Supreme Court remanded the matter for certain clarifications. Inparticular, the Supreme Courts order poses two questions, as follows:1.Did the court find that all of Highlands actual purposes wereimproper? If so, what were Highlands actual purposes and why did thosepurposes preclude relief under Section 220?2.If the court found that some of Highlands actual purposes wereproper, on what basis did the court determine that Highland was not entitled torelief that would address those proper purposes?
Question 1Highlands stated purposes are, of course, proper purposes under the law and nothing in the Opinion was intended to suggest otherwise.
Question 2 is moot
Outcome
Following briefing and en bancargument, the Supreme Court remanded the matter for certain clarifications. Inparticular, the Supreme Courts order poses two questions, as follows:1.Did the court find that all of Highlands actual purposes wereimproper? If so, what were Highlands actual purposes and why did thosepurposes preclude relief under Section 220?2.If the court found that some of Highlands actual purposes wereproper, on what basis did the court determine that Highland was not entitled torelief that would address those proper purposes?
Question 1Highlands stated purposes are, of course, proper purposes under the law and nothing in the Opinion was intended to suggest otherwise.
Question 2 is moot
- Expert Witnesses
- Lay Witnesses
Sessions
AM Session
Oral Arguments
4 Chapters
