Prickett Jones Wins Delaware Supreme Court Appeal Affirming Stockholders Still Have Valuable Inspection Rights Under Section 220

April 2, 2026

On March 25, 2026, Prickett, Jones, Elliott, P.A. won a key ruling from the Delaware Supreme Court that protects stockholders’ rights to inspect a corporation’s books and records under 8 Del. C. § 220 (“Section 220”) at a time when those rights have been under attack.

In 2023 and 2024, credible news outlets, including The Wall Street Journal and The New York Times, reported that Paramount’s then-controlling stockholders National Amusements Inc. (“NAI”) and Shari Redstone (“Redstone”) were shopping control of Paramount to potential suitors and seeking a premium on NAI’s Class A Paramount shares.  Prickett Jones served a books and record demand on Paramount pursuant to Section 220 on behalf of a holder of Paramount’s Class B shares, seeking to investigate whether Redstone and NAI were breaching fiduciary duties owed to Paramount and its stockholders by shopping NAI to suitors who might be interested in acquiring all of Paramount.  Paramount refused the demand, necessitating a trial.

Leading up to trial, news outlets continued publishing detailed reports of NAI’s and Redstone’s potential wrongdoing.  At trial, Prickett Jones relied on forty-seven news reports, including post-demand reports.  The Magistrate in Chancery rejected the news reports as unreliable hearsay and ruled plaintiff had not established a proper purpose for a books and records inspection.  Prickett Jones successfully challenged the Magistrate’s decision and the Court of Chancery, in a detailed opinion, ruled that (1) the news reports that Prickett Jones used at trial were reliable and therefore admissible, (2) the post-demand news reports were critical to the credible-basis inquiry, not prejudicial to Paramount, and, therefore, admissible, and (3) there was a proper purpose for the inspection.

On appeal, Paramount sought a categorical ruling from the Supreme Court that a trial court can never consider post-demand evidence at a Section 220 trial, and also claimed the Court of Chancery abused its discretion in considering confidentially-sourced news reports.

The Supreme Court affirmed the Court of Chancery’s decision, rejecting Paramount’s arguments.  First, the Supreme Court held that the text of Section 220, case law, and public policy do not support a bright-line rule that post-demand evidence is never admissible.  Rather, the Court of Chancery must exercise its discretion in considering post-demand evidence when that evidence is critical to the court’s credible-basis inquiry and not prejudicial to the corporation.  Second, the Court ruled that the trial court properly exercised its discretion in finding the news reports reliable.

The Supreme Court’s decision is an important ruling for stockholders.  In preparing an inspection demand, stockholders are typically limited to public information, including news reports published by reputable news outlets.  If the Supreme Court had held that detailed news reports containing information that would be known by insiders, were not sufficiently reliable, stockholders would face a real risk that most news reports would be inadmissible at a Section 220 trial.

In addition, a categorial rule that post-demand evidence is never admissible would force stockholder plaintiffs to serve a new inspection demand every time post-demand evidence corroborating their proper purpose is revealed.  This would make it unduly burdensome, inefficient, and cost prohibitive for stockholders to pursue Section 220 demands.

Last year, the Delaware legislature passed Senate Bill 21, which amended Section 220 to substantially narrow the books and records that a stockholder can even obtain from a corporation.  A contrary ruling from the Delaware Supreme Court accepting Paramount’s arguments would have further stripped stockholders’ Section 220 rights by making it, in many cases, impossible to establish a proper purpose for obtaining books and records at all.

Prickett Jones is proud to advance stockholders’ rights to ensure Section 220 remains a key tool for stockholders to investigate and deter potential wrongdoing.

Prickett Jones attorneys Michael Hanrahan, Corinne Elise Amato, Kevin Davenport, Eric Juray, Stacey A. Greenspan, and Caitlin Whetham are litigating the action on behalf of plaintiff Rhode Island Office of General Treasurer on Behalf of Employees’ Retirement System of Rhode Island.  The Supreme Court’s opinion is Paramount Global v. Rhode Island Office of General Treasurer on Behalf of Employees’ Retirement System of Rhode Island, 2026 WL 820647 (Del. 2026).