The Delaware Court of Chancery’s recent decision in High River Limited Partnership v. Occidental Petroleum, (Del. Ch. Nov. 14, 2019), considers whether a stockholder’s desire to investigate questionable—but not actionable—transactions and to communicate about them in an ongoing proxy contest constitutes a proper purpose to obtain books and records under 8 Del. C. Section 220. In denying the stockholder’s inspection request, Vice Chancellor Joseph R. Slights III acknowledged that the law is “murky” in this area, but reasoned that the court need not answer the question in the abstract, because the circumstances of this case counseled in favor of denying the inspection.

The Court’s Decision

The case arose out of the decision by defendant Occidental Petroleum Corp. to acquire Anadarko Petroleum Corp. in a $38 billion transaction. To finance the cash portion of the purchase price, Occidental sold $10 billion in preferred stock to Berkshire Hathaway and agreed to sell Anadarko’s assets based in Africa to a third party for $8.8 billion.

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