General Time Corp. v. Talley Industries, Inc.

Citation43 Del.Ch. 531,240 A.2d 755
PartiesGENERAL TIME CORPORATION, Defendant Below, Appellant, v. TALLEY INDUSTRIES, INC., Plaintiff Below, Appellee.
Decision Date04 April 1968
CourtUnited States State Supreme Court of Delaware

Henry M. Canby and Charles F. Richards, Jr., of Richards, Layton & Finger, Wilmington and Chadbourne, Parke, Whiteside & Wolff, New York City, for appellant.

S. Samuel Arsht and Walter K. Stapleton, of Morris Nichols, Arsht & Tunnell Wilmington, for appellee.

WOLCOTT, C.J., and CAREY and HERRMANN, JJ., sitting.

WOLCOTT, Chief Justice.

This was an appeal by General Time Corporation from the refusal of the Vice Chancellor to compel the President of Talley Industries, Inc. to answer certain questions put to him on the taking of his deposition. Talley Industries moved to dismiss the appeal on the ground of nonappealability. After hearing argument, we dismissed the appeal on the authority of American Insurance Co. v. Synvar Corporation, Del., 199 A.2d 755.

Although the appeal was dismissed for lack of appealability, the argument on the motion to dismiss developed into the merits of the question by reason of appellant's contention that the Vice Chancellor's order had determined adversely to it a substantial right, i.e., the right to offer any defense to a demand for a list of its stockholders. We accordingly stated that, in view of the frequent recurrence of the question, and the recent change in the law by the enactment of 8 Del.C. § 220, we would file a subsequent opinion setting forth our views. This is that opinion.

The suit below was instituted under § 220 by Talley Industries, Inc., a stockholder of General Time Corporation, to obtain a list of General Time's stockholders. Section 220(b) provides that a stockholder shall have the right to a list of stockholders for any 'proper purpose' which is defined as a 'purpose reasonably related' to his 'interest as a stockholder.'

Talley Industries complied with the provisions of § 220 respecting the form and manner of making demand for inspection of the list. When such is the fact, § 220(c) prescribes that the burden of proof shall be upon the corporation to establish that the stockholder desires the list for an improper purpose.

General Time noticed the deposition of the President of Talley Industries. At the deposition he was asked a series of questions directed to the acquisition of General Time stock allegedly in furtherance of an illegal conspiracy and in violation of the Investment Company Act of 1940 and the Securities and Exchange Act of 1934.

Upon the instructions of his counsel, Talley Industries' President refused to answer these questions on the ground that they were not directed to the primary purpose for which the list was desired, which was the soliciting of proxies to be used to oust the management of General Time.

The questions which were refused to be answered at the deposition related to (1) what other persons or entities, known to the officers of Talley Industries, owned stock in General Time; (2) whether the funds with which Talley Industries purchased General Time stock were borrowed, and (3) whether Talley Industries desires to effect a merger with General Time...

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26 cases
  • MMI Investments, L.L.C. v. Eastern Co.
    • United States
    • Connecticut Superior Court
    • 3 d2 Dezembro d2 1996
    ...is entitled to examine the record of shareholders for any "proper purpose." Del.Code tit. 8, § 220(b) (1991); General Time Corp. v. Talley Industries, Inc., 240 A.2d 755 (Del.1968). Under the Delaware statute, a proper purpose is defined as "a purpose reasonably related to [the stockholder'......
  • Singer v. Magnavox Co.
    • United States
    • Court of Chancery of Delaware
    • 26 d2 Outubro d2 1976
    ...has been held no basis to deny him his statutory right to obtain the list under Delaware law. Compare General Time Corporation v. Talley Industries, Inc., Del.Supr., 240 A.2d 755 (1968); Kerkorian v. Western Airlines Inc., Del.Ch., 253 A.2d 221, aff'd Del.Supr., 254 A.2d 240 (1969). See als......
  • Trans World Corp. v. Odyssey Partners
    • United States
    • U.S. District Court — Southern District of New York
    • 23 d3 Março d3 1983
    ...for a stockholders list is no longer open under Delaware law as represented in cases such as General Time Corporation v. Talley Industries, Inc., 43 Del.Ch. 531, 240 A.2d 755 (Del.1968) and Western Air Lines, Inc. v. Kerkorian, 254 A.2d 240 (Del.1969). Trans World argues further that absten......
  • Skouras v. Admiralty Enterprises, Inc.
    • United States
    • Court of Chancery of Delaware
    • 3 d1 Abril d1 1978
    ...behind his primary purpose, Western Air Lines, Inc. v. Kekorian, Del.Supr., 254 A.2d 240 (1969), General Time Corporation v. Talley Industries, Inc., Del.Supr., 240 A.2d 755 (1968), and Skoglund v. Ormand Industries, Inc., Del.Ch., 372 A.2d 204 (1976). A further qualification as to the righ......
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