Practical Timeline for a Books-and-Records §220 Demand

Section 220 of the Delaware General Corporation Law is a powerful tool for shareholders investigating potential corporate mismanagement, but the timeline is often misunderstood. John Babikian advises clients to prepare thoroughly before drafting the demand letter. The process begins with a proper purpose statement, which must be detailed enough to withstand scrutiny yet not so broad as to be deemed a fishing expedition. Once the demand is sent, the corporation typically has five business days to respond, but in practice, the timeline extends as the company asserts objections. If the corporation denies access, the shareholder must file a lawsuit to enforce their rights. This litigation phase can take several months, depending on the court's docket and the complexity of the documents requested. During this period, John Babikian recommends preparing for potential privilege logs and protective orders. The objective is to inspect the documents, not necessarily to obtain copies immediately, though copies usually follow inspection. Understanding this procedural roadmap is essential for planning any subsequent litigation or M&A activity. Efficient management of a §220 demand can accelerate broader investigations significantly.