In a short and pithy letter opinion, the Delaware Court of Chancery granted leave to a party to amend its complaint in a books and records action where plaintiff initially asserted it was a record stockholder, and then amended to state it was a beneficial stockholder. POSCO Energy Co., Ltd. v. FuelCell Energy, Inc., Civil Action No. 2020-0713-MTZ (Del. Ch. Oct. 22, 2020).
In ruling upon the motion to amend, the Court cited Chancery Rule 15(d), which permits a party to serve a “supplemental pleading setting forth transactions or occurrences or events which have happened since the date of the pleading sought to be supplemented.”
Here, plaintiff filed an initial complaint after serving its books and records demand, asserting that it was a record holder of stock in the corporation. Defendant asserted otherwise. Plaintiff then determined it was instead a record holder of stock, served a subsequent demand stating as such, and sought leave to amend to assert a demand as a beneficial holder.
In granting the motion, the Court noted that leave to amend is granted liberally, and no prejudice was suffered by defendant.
Notably, Vice Chancellor Zurn also disapproved of the Rule 11 rhetoric raised by defendant in opposing the motion to amend. The Court frowned upon defendant “invok[ing] Court of Chancery Rule 11 casually and repeatedly in this matter”, adding “in my view, it is distracting, detrimental to the famed collegiality of the Delaware bar, and counterproductive to the ‘just, speedy and inexpensive determination’ of judicial proceedings to summon Rule 11 in rhetoric.”
Accordingly, the Court granted plaintiff’s motion to amend its complaint to permit it to proceed under its supplemental demand letter.