Mickman v. American International Processing, L.L.C., C.A.No. 3869-VCP (July 28, 2009) (Parsons, V.C.)
In this action for inspection of books and records of two Delaware LLCs, the Delaware Court of Chancery held that a term in the LLCs’ operating agreements providing that members “shall have access to all books and records of the Company at all reasonable times” denotes a grant of broad inspection rights that includes general ledgers. Applying rules developed under the analogous corporate books and records statute, the Court further ruled that the members’ right to “access” included a right to obtain photocopies of the records. The Court ordered the LLCs to provide photocopies to the member plaintiff, finding that any concern expressed about the purpose of plaintiff’s request was irrelevant because the operating agreements did not impose a proper purpose requirement and an appropriate confidentiality agreement would minimize any legitimate concerns about plaintiff’s purpose. Finally, the Court denied plaintiff’s request for attorneys’ fees incurred in the litigation, ruling that defendants had not acted in bad faith by opposing the books and records action. The Court held that defendants’ challenge to plaintiff’s membership rights in one of the two LLCs had at least a colorable basis and therefore did not constitute vexatious or bad faith conduct.