## Facts

- AmerisourceBergen Corporation, a pharmaceutical distributor, faced extensive opioid-related investigations and litigation, including a DEA suspension of a distribution center’s license and significant settlement and defense costs.
- Stockholders Lebanon County Employees’ Retirement Fund and Teamsters Local 443 Health Services & Insurance Plan served a demand under 8 Del. C. § 220 seeking inspection of 13 categories of corporate books and records.
- The demand stated investigatory purposes, including investigating potential legal violations, mismanagement, and possible fiduciary breaches by directors or management, and evaluating potential litigation connected to any violations.
- AmerisourceBergen refused the demand, asserting the purposes were improper or inadequately stated and the requests were overbroad.
- The stockholders filed an action in the Delaware Court of Chancery to compel inspection.

## Issues

1. Whether a stockholder stating an investigatory purpose in a § 220 demand must also disclose its “ultimate objective,” including the specific action it would take if wrongdoing is confirmed.
2. Whether a § 220 plaintiff must establish a credible basis to suspect not only wrongdoing, but wrongdoing that is “actionable” in light of potential defenses and procedural barriers.
3. Whether the Court of Chancery abused its discretion by permitting a post-trial Rule 30(b)(6) deposition to determine what books and records exist and who possesses them.

## Decision

- The Delaware Supreme Court affirmed the Court of Chancery’s order compelling production of certain books and records.
- A § 220 demand that states a proper investigatory purpose need not identify the particular course of action the stockholder would take if inspection confirms suspected wrongdoing.
- Although actionability may be relevant to assessing the legitimacy of a stated purpose in some circumstances, a stockholder is not required in all cases to prove the suspected wrongdoing is actionable to obtain inspection.
- Authorizing a post-trial Rule 30(b)(6) deposition to identify what records exist and who has them was within the Court of Chancery’s remedial discretion and was not an abuse of discretion.

## Legal Principles

- Under 8 Del. C. § 220, a stockholder is entitled to inspect books and records for a “proper purpose,” meaning a purpose reasonably related to the person’s interest as a stockholder; investigating possible wrongdoing or mismanagement is a recognized proper purpose.
- The “credible basis” standard requires a credible showing that legitimate issues of possible waste, mismanagement, or wrongdoing exist; it is Delaware’s lowest evidentiary burden.
- Section 220 proceedings are summary in nature; courts should not convert them into merits litigation by requiring stockholders to pre-litigate claim viability as a general condition of inspection.
- The Court of Chancery has broad discretion to tailor inspection relief and supervise implementation, including limited discovery measures aimed at identifying the existence and location of responsive records.

## Conclusion

The Delaware Supreme Court confirmed that stockholders seeking § 220 inspection to investigate suspected wrongdoing need not disclose an “ultimate objective” and need not always show the suspected misconduct is actionable, while also affirming the Court of Chancery’s discretion to use limited post-trial discovery to implement an appropriate inspection remedy.


AmerisourceBergen Corp. v. Lebanon Cnty. Emps.’ Ret. Fund, 243 A.3d 417 (Del. 2020)