Law School Case Brief
Crane Co. v. Anaconda Co. - 39 N.Y.2d 14, 382 N.Y.S.2d 707, 346 N.E.2d 507 (1976)
The authority to inspect corporate books and records in general is traceable to the right given to partners to ascertain the names of other partners and the condition of the business, and is recognized both at common law as well as by statute. N.Y. Bus. Corp. Law §§ 624, 1315; N.Y. Not-For-Profit Corp. Law §621. The conceptual basis for this right is derived from the shareholder's beneficial ownership of corporate assets and the concomitant right to protect his investment.
The Crane Company publicly announced a proposed offer to purchase the common stock of Anaconda Company, which was opposed by the Anaconda's management. Crane, as purchasers, to inspect the list of Anaconda's stockholders to send them information regarding the proposed offer, pursuant to N.Y. Bus. Corp. Law § 1315, but Anaconda refused. Crane filed an action against Anaconda, seeking compliance with N.Y. Bus. Corp. Law § 1315. The lower court ruled in favor of Anaconda, but tht judgment was reversed on appeal. Anaconda sought further appellate review.
Does the request to inspect the stockholder list in relation to an offer to purchase violate N.Y. Bus. Corp. Law § 1315?
The New York Court of Appeals, as the state's highest court, agreed with the intermediate appellate court's decision and compelled the inspection of the stockholder list. The court held that Anaconda failed to sustain its burden of proving an improper purpose and that it could not be said that the lower court abused its discretion.
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