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BMK Business Matters

The New Jersey Supreme Court to Determine the Scope of a Shareholder’s Right to Inspect Financial and Other Company Books and Records

By: Kenneth L. Moskowitz, Esq. and Steven R. Rowland, Esq.

On December 17, 2018, the New Jersey Supreme Court agreed to review the June 1, 2018 decision of the Appellate Division in Feuer v. Merck & Co., Inc.,[1] which narrowly interpreted the statutory right of a shareholder owning a minority interest in a public corporation to inspect the company’s books and records under N.J.S.A. 14A:5-28 (“Statute”) — which sets forth the statutory inspection rights of a corporate shareholder. The Appellate Division determined that the statutory phrase “books and records of account, minutes, and record of shareholders” did not encompass the broad universe of all corporate documents, but rather only the three types of documents that are identified in the Statute, namely, “books and records of account” — which are accounting and financial documents; “minutes,” which refers to “shareholders, board and executive committee minutes…;” and, “record of shareholders” — a list of the corporation’s shareholders. In other words, the Appellate Division narrowly construed the scope of a shareholder’s statutory inspection rights as including only the three categories of documents specifically referenced in the Statute, and it rejected the argument that those inspection rights should be interpreted to include other types of records not mentioned in the Statute.Read More

Feb 04, 2019

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