April 5, 2017 – Delaware Docket

Chancery Court Rejects Stockholder’s Demand for Books and Records

Apr 05 2017

In Haque v. Tesla Motors, Inc., C.A. No. 12651-VCS (Feb. 2, 2017), Vice Chancellor Slights declined to compel the defendant, Tesla Motors, Inc. (“Tesla”), to produce certain books and records demanded by Plaintiff stockholder in an action brought under Section 220 of the Delaware General Corporate Law (“Section 220”). Applying well settled Delaware law that a stockholder’s right to inspect books and records under Section 220 is broad but not unlimited, Vice Chancellor Slights denied Plaintiff’s demand, ruling that the Plaintiff failed to demonstrate a credible basis from which the Court could infer wrongdoing.

CHANCERY COURT ISSUES DECLARATORY JUDGMENT REGARDING BOARD AND MEMBER ACTIONS TAKEN IN CONTRAVENTION OF CORPORATION’S BYLAWS

Apr 05 2017

By: Susan A. Apel & Rachel Cheasty Sanders

In Rainbow Mountain, Inc. v. Terry Begeman, C.A. No. 10221-VCMR (Del. Ch. March 23, 2017), the Delaware Court of Chancery issued a declaratory judgment on cross-motions for summary judgment regarding whether pro se defendant, Terry Begeman, was properly removed as a director, member, and officer of plaintiff nonstock corporation Rainbow Mountain, Inc. (“Rainbow Mountain” or the “corporation”). Based on uncontroverted facts, the Court determined that Terry[1] had been properly removed as Secretary, but retained his position as Senior Vice-President, director and member. Under the bylaws, as a “Regular Member” of Rainbow Mountain, Terry had the right to occupy the corporation’s land.

Archive:April 5, 2017