Landis Rath & Cobb successfully petitioned the Court of Chancery, pursuant to Section 18-305 of the Delaware LLC Act, on behalf of the controlling member of a Delaware LLC for the production of books and records to ascertain the value of the member’s interests in both the LLC as well as its wholly-owned subsidiary. After a trial on the merits, Vice Chancellor Noble granted DFG’s request, explaining that because members of a closely-held LLC “do not have access to the same quantity of information available from the regulatory filings of publicly traded companies . . .,” they should “be given slightly broader access rights.” The Court also agreed with DFG that the dual purposes of (i) valuation and (ii) determining whether to appoint someone—and if so, who—as a member of the board of managers of the LLC, both were proper for books and records demands, further explaining that so long as a single proper purpose related to one’s role as a stockholder is established, all other purposes are irrelevant. Thus, the Court granted DFG’s broad request to inspect, inter alia, the LLC’s and its wholly-owned subsidiary’s state tax returns, financial statements, employment agreements, general ledgers, business plans, budgets, projections for future performance, valuations of inventory, and grape contracts.
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