The ability of a stockholder to obtain books and records of a Delaware corporation through Section 220 of the Delaware General Corporation Law (DGCL) is frequently litigated in the Delaware Court of Chancery. Often, the parties to such litigation agree to confidentiality restrictions regarding such document productions. A recent Delaware Supreme Court case, Hauppauge Digital v. Rivest, 2023 Del. LEXIS 211 (Del. July 10, 2023), provides important guidance about such confidentiality agreements.

In Tiger v. Boast Apparel, 214 A.3d 933 (Del. 2019), the Supreme Court set forth a balancing test to apply in these circumstances. In doing so, the Tiger court rejected the notion that Section 220 productions have a presumption of confidentiality, and required the Court of Chancery to “assess and compare benefits and harms when determining the initial degree and duration of confidentiality,” as well as when modifying any confidentiality restriction. Tiger, 214 A.3d at 939. Among other considerations, the Court of Chancery must “weigh the stockholder’s legitimate interests in free communication against the corporation’s legitimate interests in confidentiality.”