In Greenlight Capital Offshore Partners v. Brighthouse Financial, C.A. No. 2022-1067-LWW, 2023 WL 8009057 (Del. Ch. Nov. 20, 2023), the Delaware Court of Chancery considered whether a stockholder of a publicly traded company was entitled to inspect the books and records of the public company’s nonpublic subsidiary for the stated purpose of “more accurately” valuing the public corporation’s publicly traded shares. Vice Chancellor Lori W. Will permitted the stockholder to do so, but greatly narrowed the scope of inspection to what was essential to the stockholder’s stated purpose.

Plaintiff Greenlight Capital Offshore Partners was a hedge fund that held shares in defendant Brighthouse Financial Inc., a public holding company that sold insurance proceeds through private subsidiaries. Brighthouse Life Insurance Co. (BLIC) was a subsidiary of Brighthouse Holdings, LLC, a private, wholly owned subsidiary of Brighthouse. BLIC owned Brighthouse Reinsurance Co. of Delaware (BRCD), a special purpose financial captive insurance company. Insurance companies like BLIC are required to hold reserves for their expected obligations under issued policies. As a captive insurer, BRCD provided reinsurance to BLIC for such reserves. Brighthouse relied on dividends or other capital inflows from subsidiaries, including BRCD, to meet its obligations and pay dividends on its common stock.