Melzer v. CNET Networks, Inc.
Chancery Court of Delaware
934 A.2d 912 (2007)
Martin Melzer and other shareholders (plaintiffs) of CNET Networks, Inc. (defendant) filed a derivative suit alleging that CNET's directors had backdated stock options. CNET got the case dismissed for failure to first make a demand on the board, and the court let the shareholders amend to plead that such a demand would have been futile. To support that argument, the shareholders demanded CNET's books and records. CNET resisted, the shareholders moved to compel, and CNET eventually agreed to let them see some documents but not others. The dispute here was over scope: the shareholders wanted documents from before they bought their CNET stock, because those older records were needed to show the board's demand would have been futile.
Whether a stockholder's statutory right to inspect corporate books and records can include documents that predate the stockholder's purchase of the stock.