Under 8 Del. C. Section 220, stockholders of Delaware companies are entitled to inspect certain books and records of the company upon stating a proper purpose. A long-recognized proper purpose for a books-and-records demand is an interest in valuing one’s stock. In The Ravenswood Investment L.P. v. Winmill & Co., C.A. No. 7048-VCN (Del. Ch. May 30, 2014), the Court of Chancery decided the “novel” issue of whether a company, in response to a books-and-records demand, may condition the provision of nonpublic financial information on a trading restriction. Finding that the trading restriction would “inappropriately frustrate a fundamental stockholder right” to value its stock, the court held that the company could not require an agreement on the part of the requesting stockholder not to trade its stock for a certain period of time after receipt of the requested information.


The plaintiff, The Ravenswood Investment Co. L.P., held 10,000 shares of nonvoting stock in defendant Winmill & Co. Inc., a holding company for various investment securities. Although Winmill’s stock trades on the over-the-counter market, it is not a reporting company under the federal securities laws. As a result, current financial information was not publicly available, and the last time the company released financial information was Feb. 17, 2010, for the nine months ending Sept. 30, 2009.