Plaintiff brought suit under Section 220 of the Delaware General Corporation Law to demand certain books and records of the Defendant regarding various alleged misrepresentations as to its financial affairs. A Maryland derivative action previously brought by a different plaintiff concerning the same conduct had been dismissed (after having survived an earlier motion to dismiss), where a special litigation committee set up by the Defendant refused to proceed further after concluding the action was without merit. The Court of Chancery rejected Plaintiff’s demand for books and records because: (1) Plaintiff received a number of documents that should suffice for the purpose of evaluating a possible derivative suit and failed to articulate a reasonable need for additional documents, and (2) assuming Plaintiff pled an additional purpose for bringing suit, the fact that the Maryland derivative litigation previously survived a motion to dismiss based on the heightened pleading standards of the Private Securities Litigation Reform Act was insufficient in itself to demonstrate a credible basis for suspecting wrongdoing sufficient to warrant granting Plaintiff access to additional records and documents of the Defendant.
