Section 220 of the Delaware General Corporation Law provides a mechanism for stockholders of a Delaware corporation to inspect books and records of the corporation. To avail oneself of Section 220, the party seeking books and records must be a current stockholder of the company. Section 262 of the Delaware General Corporation Law provides a mechanism for stockholders who are cashed out in a merger to seek appraisal of the value of their stock
The petitioners in this case were owners of common stock in the respondent Zoox, Inc., an automotive technology company founded in 2014 to develop self-driving cars for ride-hailing services. Zoox was acquired by Amazon.com under a merger agreement dated June 24, 2020. On June 25, 2020, the merger was approved by written consent of the holders of the company’s common and preferred stock. On July 6, 2020, the company issued an information statement providing the estimated merger consideration per share.
The petitioners served a Section 262 demand for appraisal of their stock on July 23, 2020. The petitioners subsequently served Section 220 demands on the company on August 4 or 5, 2020. The merger closed on August 10, 2020. Because a company has five business days to respond to a Section 220 demand, the merger closed and divested the petitioners of their status as stockholders before the company’s time to respond to the demand had run. Thus, the petitioners were precluded from continuing to pursue books and records under Section 220.