Delaware Supreme Court Clarifies When Emails Should Be Produced

On January 29, 2019, the Delaware Supreme Court provided guidance to the Court of Chancery regarding the scope of a stockholder's inspection rights under Section 220 of the Delaware General Corporation Law or similar LLC or contractual provisions, stating that "if a company observes traditional formalities, such as documenting its actions through board minutes, resolutions, and official letters, it will likely be able to satisfy a § 220 petitioner's needs solely by producing those books and records."

Section 220 provides stockholders with a qualified right to obtain copies of the corporation's books and records upon a showing of a "proper purpose." Delaware courts have held that investigating wrongdoing by directors and officers is a proper purpose, but the stockholder must show a "credible basis" to suspect that wrongdoing has occurred. A production of documents under Section 220 is narrower than typical litigation discovery — the stockholder can only inspect the