Simeone v. Walt Disney Company

Court of Chancery of the State of Delaware · 2023 · Corporations

Updated August 22, 2026

CorporationsSection 220 books and recordsfiduciary dutiesboard discretion8 Del. C. § 220books and recordsproper purposecredible basis

Facts

After criticism from employees over Disney’s initial silence on Florida HB 1557, Disney’s board held discussions about political engagement, communications, the legislation, and employee response, after which Disney publicly opposed the bill. The plaintiff, a longtime Disney stockholder, was solicited by counsel to serve a Section 220 demand asserting that Disney’s officers and directors may have breached fiduciary duties by opposing HB 1557 and risking loss of benefits associated with the Reedy Creek Improvement District. Disney responded that no proper purpose existed but nevertheless produced board minutes and relevant policies, while declining to produce additional materials such as director questionnaires and emails. The plaintiff then sued to compel broader inspection.

Issue

Whether the plaintiff demonstrated a proper purpose under 8 Del. C. § 220 to inspect Disney’s additional books and records based on a claimed need to investigate possible fiduciary wrongdoing tied to Disney’s opposition to HB 1557. The court also considered whether the stated purposes were actually the plaintiff’s own and whether Disney had already produced all necessary and essential documents.

Rule

Under 8 Del. C. § 220, a stockholder must prove by a preponderance of the evidence a proper purpose reasonably related to the stockholder’s interest as a stockholder, and must prove that each category of requested books and records is necessary and essential to that purpose. When the purpose is to investigate wrongdoing, the stockholder must present some evidence establishing a credible basis from which the court can infer possible mismanagement; disagreement with a board’s business decision, even one that turns out poorly, is not enough. A defendant may also defeat inspection by showing that the stated purposes are pretextual and actually belong to counsel rather than the stockholder.

See the holding & full analysis

Create a free KwikCourt account to unlock the rest of this brief — and practice the case.

The court's holding and reasoning
Doctrine tests, pitfalls & exam hypotheticals
10 practice questions + 4 AI-graded essays on this case

Free sample · practice this case

Test yourself

One of 10 multiple-choice questions for this case. Pick an answer to see why.

Nadia Flores owns shares of Harbor Lantern Media, a Delaware corporation headquartered in Los Angeles. After the company publicly supported a controversial Arizona education bill, a nonprofit advocacy group in Phoenix recruited Nadia through its lawyers to sign a Section 220 demand; at deposition, Nadia admits she did not previously consider seeking records, did not read the draft demand, and only wants to learn which executives chose to issue the statement so the names can be publicized.

If Harbor Lantern opposes inspection, what is the strongest basis for denying Nadia's demand?

Explanation. Section 220 requires a proper purpose reasonably related to the person's interest as a stockholder. The majority opinion recognized that, in rare cases, a corporation can defeat inspection by proving the stated purposes are not the stockholder's actual purposes, but instead belong to counsel or another sponsor. Nadia's testimony that she was solicited, did not meaningfully participate, and only wants names for public exposure supports a finding of pretext. (Derived from Simeone v. Walt Disney Company (n.d.).)