A decision by the Delaware Supreme Court in AmerisourceBergen Corp. v. Lebanon Cty. Employee’s Ret. Fund & Teamsters Local 443 Health Servs. and Ins. Plan clarifies a stockholder’s burden in obtaining corporate records for the purposes of investigating corporate wrongdoing. Specifically, the court held that stockholders need not identify their intended objectives when investigating corporate wrongdoing and are not required to establish that the alleged wrongdoing is judicially actionable.
AmerisourceBergen is one of the largest opioid distributors in the country. Following a litany of lawsuits and investigations related to its opioid distribution and its alleged failure to address suspicious ordering, the plaintiffs served a Section 220 demand requesting inspection of books and records that relate to the company’s involvement in the opioid addiction crisis. AmerisourceBergen rejected the demand, claiming that the demand failed to state a proper purpose and was overbroad in its request.
In response, the plaintiffs filed an action in the Court of Chancery seeking to compel production of the requested documents. The Court of Chancery found that the plaintiffs had established a credible basis to suspect AmerisourceBergen of mismanagement. More important, the Court of Chancery held that a stockholder is not required to state the objectives of their investigation and rejected AmerisourceBergen’s contention that the plaintiffs were required to show that the wrongdoing they sought to investigate was judicially actionable. As to relief awarded, the Court of Chancery granted an inspection of formal board-level documents and a 30(b)(6) deposition of the company to determine if any additional responsive documents existed. AmerisourceBergen subsequently moved for and was granted interlocutory appeal.