HA 5 to SS 1 for SB 21

This Amendment to SS 1 for Senate Bill 21 clarifies that a corporation may require, as a condition to producing books and records to a stockholder under a Section 220 demand, that the stockholder agree that any information included in the corporation’s books and records produced to that stockholder is deemed incorporated by reference in any complaint filed by or at the direction of the stockholder in relation to the subject matter referenced in the demand. This Amendment to SS 1 for Senate Bill 21 also changes the standard in a proceeding brought by a stockholder under subsection (c) of Section 220 of Title 8 to compel the inspection of additional records to (1) reasonably identifying the documents the stockholder needs and making a showing such records exist (instead of a compelling need); and (2) demonstrating by a preponderance of the evidence, or more likely than not, rather than the higher standard of clear and convincing evidence that such specific records are necessary and essential to the proceeding. This is intended to codify the standard for production of books and records set forth in the Supreme Court’s decision in KT4 Partners LLC v. Palantir Techs. Inc., 203 A.3d 738 (Del. 2019).