COLCHESTER, Conn., Feb. 1, 2011 (GLOBE NEWSWIRE) -- The law firm of Scott+Scott LLP achieved a significant legal victory for shareholder rights in a lawsuit brought on behalf of a shareholder of VeriFone, Inc. (NYSE:PAY) in a case that was pending before the Delaware Supreme Court.
The case involved a novel issue under Delaware corporate law: Do shareholders have the right to inspect a corporation's books and records under Section 220 of Delaware General Corporation Law after filing a shareholder derivative action against a corporation's board of directors? The Delaware Court of Chancery had previously ruled that shareholders are not entitled to inspect a corporation's books and records under Section 220 once they have filed a derivative action against members of the board. This ruling prevented shareholders from using books and records requests to replead amended shareholder derivative complaints and thus weakened the ability of shareholders to hold disloyal directors accountable.
The Delaware Supreme Court – in an opinion entitled King v. VeriFone Systems, Inc., No. 330, 2010 (Del. Jan. 28, 2011) which was issued on Friday, January 28, 2011 – reversed the Delaware Court of Chancery, and made it clear that shareholders have a fundamental right to inspect a corporation's books and records under Section 220 – even after the shareholders have already filed a shareholder derivative suit. The Delaware Supreme Court's decision in King v. VeriFone removes barriers that had prevented shareholders from gaining access to a corporation's books and records to support claims of misconduct in shareholder derivative suits.
"The Delaware Supreme Court's decision is an important victory for shareholder rights," said the firm's Managing Partner, David Scott. "The right to inspect a corporation's books and records is one of the best ways for a shareholder to determine whether the board has engaged in wrongdoing or has put its own interests before the interests of the shareholders. It is crucial that shareholders be allowed to make books and records requests after filing a shareholder derivative suit."
Scott+Scott has significant experience in prosecuting major securities, antitrust and employee retirement plan actions throughout the United States. The firm represents pension funds, foundations, individuals and other entities worldwide.
CONTACT: Scott+Scott LLP (800) 404-7770 (860) 537-5537