In re New Media Books and Records Action
Annotate this CasePlaintiffs were members of New Media Investors II-B, LLC, which was established as a vehicle for investing in Jenzabar, Inc. In 2004, Jenzabar was recapitalized, and New Media received junior preferred stock and warrants. In 2013, the warrants lapsed. That same year, efforts to dissolve New Media were initiated, although Plaintiffs did not cash their distribution checks. Instead, they made a books and records request demanding valuation of their holdings of New Media to investigation into misconduct by the managing member of New Media and the CEO of Jenzabar and others in the course of operating New Media. The Court of Chancery granted the request in part, holding (1) Plaintiffs failed to demonstrate that investigating misconduct or wrongdoing is their proper purpose; and (2) Plaintiffs demonstrated that valuation is a proper purpose, but the inspection rights should not extend to Jenzabar, and Plaintiffs may inspect only the books and records for the years 2010 forward.
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