## Facts

- Plato A. Skouras, a minority stockholder of Admiralty Enterprises, Inc., sought to inspect corporate books and records to investigate suspected mismanagement and personal use of corporate assets by officers and directors.
- Admiralty was a closely held family shipping corporation with wholly owned and controlled shipping subsidiaries and related entities.
- Skouras’s stated concerns included suspected improper payments and benefits to insiders, excessive and nonbusiness expenses, and other alleged waste and diversion of corporate resources.
- Skouras made a written demand under 8 Del. C. § 220 for inspection of Admiralty’s records and also sought records of affiliates and subsidiaries.
- Admiralty resisted, arguing Skouras’s real motive was harassment and leverage for a premium buyout, that the demand was technically deficient and overbroad, and that laches applied because many challenged matters were old and included periods when Skouras had been a director (1963–1967).

## Issues

1. Whether Skouras demonstrated a “proper purpose” under 8 Del. C. § 220 by seeking inspection to investigate possible mismanagement rather than to harass or force a buyout.
2. Whether alleged technical defects in the demand or disputes about scope justified denying inspection.
3. Whether § 220 permitted inspection of records of subsidiaries and affiliates where the requesting stockholder owned shares only in the parent.
4. Whether laches warranted denying or limiting inspection based on delay and the age of the transactions, including those occurring during Skouras’s tenure as a director.

## Decision

- The Court of Chancery granted the § 220 petition in part and denied it in part.
- The court found Skouras had a proper purpose to investigate possible mismanagement and waste.
- The court ordered inspection of specified books and records of Admiralty itself.
- The court denied inspection of records of subsidiaries and affiliates because they were separate corporate entities and were not shown to be alter egos or instruments of fraud.
- The court limited inspection to transactions occurring after August 1967, relying on laches to restrict the temporal scope rather than to bar inspection entirely.

## Legal Principles

- A stockholder is entitled to inspect a corporation’s books and records under 8 Del. C. § 220 upon showing a proper purpose; investigating possible mismanagement or wrongdoing is a proper purpose.
- A stockholder’s additional motives (including hope that an investigation may facilitate a stock sale) do not defeat inspection if the mismanagement investigation is a bona fide, substantial purpose.
- Technical noncompliance with demand formalities may not bar relief where the corporation is adequately informed of the stockholder’s purpose and basis for inspection.
- A stockholder of a parent corporation is not automatically entitled under § 220 to inspect books and records of subsidiaries or affiliates absent proof justifying disregard of separate corporate existence (e.g., fraud or alter-ego circumstances).
- Equitable defenses such as laches may justify limiting the time period covered by an inspection order, even when a proper purpose is established.

## Conclusion

The court held that a minority stockholder’s concrete concerns about mismanagement supported a proper § 220 purpose, but it confined relief to inspection of the parent corporation’s own records and curtailed the request to post-August 1967 transactions based on delay and the staleness of earlier matters.


Skouras v. Admiralty Enters., Inc., 386 A.2d 674 (Del. Ch. 1978)