Books and records inspection demands commonly arise in connection with a major transaction of a Delaware corporation, including a merger. The decision of Kosinski v. GGP, Inc., C.A. No. 2018-0540-KSJM (Del. Ch. Aug. 29, 2019) involved such a demand to investigate mismanagement, including whether plaintiff had established a “credible basis” to infer mismanagement.

In Kosinski, a real estate company GGP, Inc. was acquired by another real estate company already owning a percentage of GGP’s common stock.  Plaintiff brought a Section 220 demand arguing that the buyer of GGP was GGP’s de facto controlling shareholder, and that the procedural protections set forth by the Delaware Supreme Court in Kahn v. M & F Worldwide Corp., 88 A.3d 635 (Del. 2014), which required deferential review of a merger process involving a controller, had failed to be implemented.

In opposition, GGP challenged plaintiff’s stated purposes for inspection, arguing that it had formed a special committee to negotiate the merger consistent with Kahn.  However, the Court found that plaintiff pointed to facts suggesting that the special committee failed to obtain a fair price and that its members potentially were interested or lacked independence.   

Thus, plaintiff’s Section 220 demand was granted. The Court of Chancery held that because procedural protections were lacking, the transaction may not have been at arm’s length, and that plaintiff had demonstrated facts to established a “credible basis” to investigate potential breaches of fiduciary duty.


In connection with a merger, a corporation should ensure that all procedural protections are met under under Kahn v. M&F Worldwide Corp. Otherwise, it may be ordered to make documents available for inspection under 8 Del. C. § 220, which could lead to further litigation and potential liability.

Carl D. Neff is a partner with the law firm of Pierson Ferdinand LLP, and practices in Delaware. You can reach Carl at (302) 482-4244 or at