Often times, it is necessary for a stockholder to enter into a confidentiality agreement to view a corporation's books and records. The Court of Chancery in Jefferson v. Dominion Holdings, Inc., C.A. No. 8663-VCN (Del. Ch. Sept. 24, 2014) explained this process.
As stated by the Court, a confidentiality agreement should:
- reasonably protect the confidentiality of the books and records, and
- allow the stockholder to review the documents, not only with his advisors, but also with other shareholders who share similar views.
As further provided by the Court: "A reasonable confidentiality agreement protects the Court from being called upon to inquire into the motives that may have animated a stockholder's desire to inspect the corporation's books and records."
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
