Court Grants Disclosure Of Privileged Documents Under Garner Doctrine

In the recent Court of Chancery decision of De Vries v. Del Mar, L.L.C., C.A. No. 9372-ML (June 3, 2015), Master LeGrow granted disclosure of privileged information under the Garner doctrine relating to the settlement of a $3 million loan to Del Mar, LLC (the “Company”), the transfer of the Company's primary asset – a property located in Baja, Mexico valued at $68.9 million – to the lender in post-settlement negotiations, and potential mismanagement and self-dealing by the managing member of the Company, Baja Management, LLC.

This Final Report issued by Master LeGrow is significant in that the Court held that the plaintiffs demonstrated sufficient "good cause" to compel inspection of privileged books and records of the Company related to the post-settlement events under the Garner doctrine of the Fifth Circuit Court of Appeals, adopted by the Delaware Supreme Court in Wal-Mart Stores v. Indiana Electrical Workers Pension Trust Fund IBEW, 95 A.3d 1264 (Del. 2014).