In a lengthy decision, Delaware Vice Chancellor Laster ruled that shareholders had the right to inspect the formal board materials of AmerisourceBergen Corporation and conduct a 30(b)(6) deposition to determine whether they needed additional documents, including informal board materials and officer-level documents.

In Lebanon Cty. Emp. Ret. Fund v. AmerisourceBergen Corp., stockholders sought to inspect AmerisourceBergen’s books and records relating to the company’s compliance with opioid distribution controls, citing corporate wrongdoing as its proper purpose for seeking the documents pursuant to Section 220 of the Delaware General Corporation Law. The court held that the stockholders had shown a credible basis to infer possible wrongdoing by AmerisourceBergen based on “the flood of government investigations and lawsuits” and “corporate trauma” (as evidenced by the company’s recent $10 billion offer to settle with state attorneys).

AmerisourceBergen argued that the stockholder plaintiffs must state up front in the Section 220 demand what they planned to do with the books and records, including any plans other than filing litigation. The vice chancellor rejected AmerisourceBergen’s argument on grounds that it is contrary to Delaware law and would require stockholders “to commit in advance to what [they] will do with an investigation before seeing the results of the investigation.” The vice chancellor similarly rejected AmerisourceBergen’s argument that the plaintiffs were not entitled to inspect books and records because the company had an exculpatory provision in its certificate of incorporation.

As this case confirms, investors can use books and records for non-litigation purposes and do not need to commit to plans for the books and records before receiving the documents. For these reasons, inspection rights can be an important tool among and alongside other rights available to investors, including appraisal rights, shareholder proposals and remedies for corporate misconduct.

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