It is well settled that stockholders of Delaware companies generally have the right to inspect the company’s books and records upon the showing of a proper purpose. However, as demonstrated in the Court of Chancery’s decision in Fuchs Family Trust v. Parker Drilling, C.A. No. 9986-VCN (Del. Ch. Mar. 4, 2015), that right is not absolute. Even where a proper purpose exists, the demand is properly denied where the requested books and records would not advance that purpose.
Background
On Aug. 9, 2007, defendant Parker Drilling Co. disclosed that it was under investigation by both the U.S. Department of Justice and the Securities and Exchange Commission for potential violations of the Foreign Corrupt Practices Act (FCPA). In particular, Parker, which provides drilling and drilling-related services, was being investigated for its alleged participation in bribery schemes in Kazakhstan and Nigeria. Parker later disclosed that an internal investigation “ha[d] identified potential issues relating to potential non-compliance with applicable laws and regulations, including the FCPA.”
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