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Business Entities Keyed to Chiappinelli
Henry v. Phixios Holdings, Inc.
Citation:2017 WL 2928034 (Del. Ch. Jul. 10, 2017)
An alleged stockholder seeks books and records for the purpose of investigating mismanagement of the company, communicating with other stockholders, and valuing his shares. The company has rebuffed all examination efforts because it alleges that the plaintiff is no longer a stockholder. Company’s initial three directors adopted bylaws that contain stock transfer restrictions and all company stock certificates were issued after that time and are subject to those restrictions. Under these restrictions, stock may be revoked by a majority of all voting stockholders if a stockholder is found to be engaging in acts that are damaging to the company. On June 23, 2016, Henry demanded the company to allow him to examine a list of the company stockholders and inspect books and records. The company held a special meeting and revoked all of the common stock held by Henry under the stockholder agreement.
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