AmerisourceBergen Corporation v. Lebanon County Employees’ Retirement Fund
Delaware Supreme Court
243 A.3d 417 (2020)
AmerisourceBergen Corporation (defendant) was a major opioid distributor in the United States. The license of AmerisourceBergen’s distribution center in Orlando, Florida, was suspended by the United States Drug Enforcement Administration (DEA) for failure to properly maintain its controls pursuant to federal law. AmerisourceBergen and the DEA settled. However, AmerisourceBergen continued to be investigated and sued by various entities. AmerisourceBergen paid over $1 billion for expenses related to opioid lawsuits and investigations and was expected to pay $100 billion more in future expenses. Lebanon County Employees’ Retirement Fund (the retirement fund) (plaintiff) served an inspection demand under Delaware General Corporation Law (DGCL) § 220 on AmerisourceBergen. The demand sought inspection of 13 categories of books and records and listed four investigatory purposes: (1) to investigate potential legal violations committed by AmerisourceBergen’s board of directors or management, (2) to gather information for potential remedies for any violations, (3) to evaluate the independence of the board of directors, and (4) to assess potential future litigation opportunities connected to any legal violations. AmerisourceBergen rejected the demand, asserting that the demand did not state a proper purpose or, in the alternative, that the request was overbroad. The retirement fund filed an action against AmerisourceBergen in the Delaware Court of Chancery and requested that the court compel AmerisourceBergen to provide the requested documents. The court of chancery ruled in favor of the retirement fund, holding that the demand stated a proper purpose for the inspection of certain board materials. AmerisourceBergen appealed, arguing that the retirement fund failed to specifically state its goals in the inspection demand and that the potential litigation referred to in the fourth investigatory purpose was barred by a procedural obstacle.
Rule of Law
Holding and Reasoning (Traynor, J.)
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