DealLawyers.com Blog

Chancellor McCormick’s brief letter opinion in Floreani v. FloSports, (Del. Ch.; 10/24), may be worth sticking in your files, because it provides a handy roadmap on how to draft a Section 220 books & records request. Unfortunately for the plaintiffs in this case, that drafting lesson came at their expense, because the Chancellor concluded that they managed to bungle three attempts at complying with Section 220.  Anyway, here’s how Chancellor McCormick summarized the statutory requirements:

Breaking it down, Section 220(b) requires that a demand: (1) be in writing, (2) be under oath, (3) state the stockholder’s purpose, and (4) be directed to the corporation at its registered agent or principal place of business. (5) If the stockholder is not a record holder, then the demand must be accompanied by documentary evidence of beneficial ownership of the stock. (6) If the demand is sent by an attorney, then it must be accompanied by a power of attorney. That’s four form-and-manner requirements that apply in all circumstances and two that apply in certain circumstances. The form-and-manner requirements are not onerous, but they are strictly enforced.

– John Jenkins