Delaware Court Emphasizes Strict Compliance With Books And Records Demand Requirements

As we've discussed previously, it is imperative that a stockholder making a books and records demand under Section 220 of the Delaware General Corporation Law (DGCL) comply with all statutory requirements. The recent decision of Martin Floreani et al. v. FloSports, Inc., C.A. No. 2023-0684-LM (Del. Ch. Oct. 31, 2024) underscores this important principle. As discussed below, the Court's ruling emphasizes that failure to comply with Section 220's technical requirements will doom an inspection demand, regardless of its underlying merits.

This case arose from three books and records demands served by plaintiff stockholders Martin, Christina, and Charlene Floreani against FloSports, Inc. under Section 220 of the DGCL. The Delaware Court of Chancery, with Chancellor McCormick presiding, examined each of the three demands and found them all deficient under Section 220.