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It has long been established that the desire to obtain a list of stockholders in order to solicit proxies for the election of a slate of directors in opposition to management constitutes a proper purpose.
Plaintiff shareholder brought suit seeking an order compelling defendant corporation to present the stock ledger or a list of stockholders pursuant to plaintiff's right as a shareholder under Del. Code Ann. tit., 8 § 220. Defendant refused, claiming that there was no proper purpose and that a member of plaintiff's committee represented interests that were adverse to defendant corporation.
Did the plaintiff give a proper purpose for the presentment of documents, thereby warranting the judgment in plaintiff’s favor?
The trial court found that plaintiff had given a proper purpose for the presentment of the documents. The court further found that defendant could not claim a conflict of one member of the committee who happened to be a lawyer just because he might disclose client information in the future. The court therefore found for plaintiff and ordered defendant to disclose the requested documents.