While certain recent amendments to Section 220 of the Delaware General Corporation Law (DGCL) significantly altered the landscape over which battles between stockholders and corporations regarding inspection of corporate books and records would be fought substantively, those amendments did not alter what have become known as the “form and manner” requirements for demanding such an inspection. Recently, in the appeal of Martin Floreani v. FloSports, No. 491, 2024 (Nov. 24, 2025), the Delaware Supreme Court took the opportunity to address two key aspects of the form and manner requirements: the five-day waiting period before the stockholder brings litigation, and the “under oath” requirement for the demand for inspection. As discussed below, the Supreme Court strictly applied these requirements to affirm the Court if Chancery’s ruling that three separate books-and-records demands by the stockholders were invalid.
Background of the Appeal
The underlying litigation involved a Section 220 books-and-records dispute between siblings who are stockholders in FloSports, Inc., a privately held Delaware corporation. The plaintiffs, Martin, Christina, and Charlene Floreani, sought to inspect FloSports’ books and records, and stated their purpose for the inspection was to value and potentially sell their shares. Ultimately, the stockholders ended up making three separate demands for inspection pursuant to DGCL Section 220, all of which were denied by FloSports for failing to meet statutory requirements, including for a failure to abide by the form and manner requirements of that statue. As the Supreme Court noted, a stockholder wishing to inspect corporate books and records as permitted by Section 220 must first establish that:
- Such stockholder is a stockholder;
- Such stockholder has complied with this section respecting the form and manner of making demand for inspection of sch documents; and
- The inspection such stockholder seeks is for a proper purpose.
The Supreme Court went on to highlight that in complying with the form and manner requirement, the demanding stockholder must either “in person or by attorney or other agent,” make a “written demand under oath” directed to the company stating the purposes for the demand and the information sought for inspection.
The Section 220 Demands
First Demand
The first demand was made in November 2022 and was denied by FloSports for not being accompanied by a power of attorney, not being made under oath, and failing to identify the stockholders making the demand. Despite these deficiencies, FloSports engaged in discussions with and provided some financial information to the demanding stockholders.
Second Demand
The second demand, made in June 2023, was also rejected. FloSports argued, among other things, that the demand was not made under oath because the stockholder affidavits were signed two weeks before the demand was executed by the sending lawyer, creating uncertainty about whether the verified demand was the same as the final version. The stockholders ended up filing a verified complaint in the Court of Chancery seeking to compel an inspection.
Third Demand
The third demand was made on Sept. 27, 2023, and the stockholders simultaneously moved to amend their complaint to include this demand. FloSports rejected the demand, arguing that the stockholders did not wait the required five business days before applying to the court, as mandated by Section 220.
The Court of Chancery’s Decision
The Court of Chancery held that all three demands failed to meet Section 220’s requirements. The first demand was deficient for not being under oath, among other reasons. The second demand failed because the stockholders did not sign the oaths themselves and there was no evidence that the verified demand was the same as the final version. The third demand failed because the stockholders did not wait the statutory five-day period before seeking court intervention.
The Supreme Court’s Decision
The Delaware Supreme Court affirmed the Court of Chancery’s holdings. The court did so by emphasizing the strict compliance required with Section 220’s procedural requirements, including the five-day waiting period and the “under oath” requirement.
Third Demand and Five-Day Waiting Period
The court held that the third demand did not comply with the five-day waiting period, as the stockholders filed a motion to amend the complaint on the same day the demand was made. This action violated the statute’s requirement, which aims to provide the corporation a brief period to consider the demand without litigation pressure.
Second Demand and 'Under Oath' Requirement
Regarding the second demand, the court found that the stockholders did not demonstrate that the demand was made “under oath.” This was so because the stockholder affidavits were signed two weeks before the demand was executed and there was no evidence that the verified demand was the same as the final version. Indeed, there was evidence that the final version of the third demand may have differed materially from the version the stockholders might have reviewed and affirmed under oath (for instance, there were changes in the documents sought).
Key Takeaways for Legal Practitioners
Strict Compliance with Section 220: The case underscores the importance of strict adherence to Section 220’s procedural requirements. Stockholders must ensure that demands are made under oath and that the five-day waiting period is observed before seeking court intervention.
“Under Oath” Verification: Legal practitioners should ensure that the final version of a demand is verified under oath by the stockholders themselves and that any discrepancies in timing or content between the affidavit and the demand should be addressed to avoid procedural challenges. While it does not appear that there must be evidence that a stockholder affidavit supporting a demand must be signed and notarized on the same day as the demand is dated, they should be reasonably contemporaneous and the affidavit should make clear that it is verifying the demand that is actually being made.
Five-Day Waiting Period: The five-day waiting period is strictly enforced, and any application to the court during this period is impermissible. Practitioners should advise clients to wait the full period before proceeding with litigation to avoid dismissal.
Litigation Strategy: The case highlights the need for careful litigation strategy and timing when dealing with Section 220 demands. Legal counsel should be aware of the potential for procedural pitfalls and plan accordingly to ensure compliance with statutory requirements.
In conclusion, the Delaware Supreme Court’s decision in this case reinforces the necessity for stockholders and their legal counsel to meticulously follow the procedural requirements of Section 220 to successfully invoke inspection rights.
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