Thomas & Betts Corporation v. Leviton Manufacturing Co., Inc.
Supreme Court of Delaware
681 A.2d 1026 (1996)
Thomas & Betts Corporation (plaintiff) secretly acquired 29.1 percent of closely held Leviton Manufacturing Co., Inc. (defendant), hoping to acquire the company, and after failing to build a working relationship with Leviton insiders, served a formal demand under Delaware's section 220 to inspect corporate records, stating the documents were needed to investigate possible waste and mismanagement and to value its shares. Leviton refused, and Thomas & Betts sought to compel inspection in the Court of Chancery, which found the demand was actually motivated by the improper purpose of gaining acquisition leverage, but nonetheless allowed narrow inspection for valuation purposes given Thomas & Betts's changed circumstance of being locked in as a minority shareholder; Thomas & Betts appealed the scope limitation.
Whether the court should grant a stockholder's demand for inspection for the purpose of investigating waste and mismanagement, where the allegations of waste and mismanagement are not supported in the record.