A Delaware Court of Chancery decision highlights the importance of complying with the books and records requirements imposed by Section 220 of the Delaware General Corporation Law. At issue was a Delaware corporation operating in China which failed to comply with a December 2012 default judgment ordering it to produce corporate books and records in Delaware pursuant to Section 220. The corporation was only willing to make its books and records available for inspection at its principal office in China. The court held the corporation in contempt of court and ordered the corporation to provide an extremely broad list of documents, including detailed financial and strategic information, for review in Delaware. The court, as a sign of its displeasure with the corporation's disregard of Section 220, further granted the aggrieved stockholder a right to put his shares back to the corporation at a price based on book value and appointed a receiver for the corporation's assets to enforce the court's orders.
Deutsch v. ZST Digital Networks, Inc., C.P.A. No. 8014-VCL (March 20, 2013).