Wachtell Lipton Discusses Recent Developments with DGCL Section 220 as Pre-Complaint Discovery

Two recent decisions of the Delaware courts confirm that Section 220 of the Delaware General Corporation Law will be consistently interpreted to grant pre-complaint discovery to stockholders seeking to prepare fiduciary-breach litigation.

In Pettry v. Gilead Sciences, Inc., a group of Gilead stockholders sought to inspect corporate documents for the purpose of investigating wrongdoing in the development and marketing of HIV drugs.  C.A. No. 2020-0132-KSJM (Del. Ch. Nov. 24, 2020).  Gilead opposed the demand, principally on the ground that the stockholders’ basis to suspect such wrongdoing—unproven allegations in other lawsuits—was inadequate to justify inspection.  The court disagreed, finding … Read more