In the recent decision of Wolst v. Monster Beverage Corporation, C.A. No. 9154-VCN (Oct. 3, 2014), the Court denied plaintiff’s Section 220 books and records demand for failure to state a proper purpose.

In the demand, plaintiff sought inspection to determine whether there is a basis to bring a derivative suit based on certain wrongs alleged in a prior derivative action.  The Court found that the derivative suit dealt with conduct that occurred seven years prior, and would be time barred under the doctrine of laches which is guided by the three year statute of limitations under 10 Del. C. § 8106.

Accordingly, the Court found that plaintiff failed to assert a proper purpose under Section 220, and therefore denied plaintiff’s request for inspection.

If you would like to speak to a litigator in Fox Rothschild’s Delaware office, please reach out to Sid Liebesman (302) 622-4237 or Seth Niederman (302) 622-4238.