September 14, 2016

Clarifying the Meaning of "Stockholder" for a Section 220 Action

Delaware Business Court Insider

In a decision with facts egregious enough to justify two references to the definition of “chutzpah,” Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery provided helpful guidance on how to establish and refute “stockholder” status for purposes of bringing an action to inspect corporate books and records under 8 Del. C. Section 220, in Pogue v. Hybrid Energy, C.A. No. 11563-VCG (Del. Ch. Ct. Aug. 5). The vice chancellor held that “inclusion on a stock ledger is prima facie evidence of stock ownership but ... the corporate defendant may rebut that presumption by clear and convincing evidence.”