IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

MARK LAVIN,

 Plaintiff,

 v.

WEST CORPORATION,

 Defendant.

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 C.A. No. 2017-0547-JRS

OPINION

Date Submitted: October 9, 2017

Date Decided: December 29, 2017

Peter B. Andrews, Esquire, Craig J. Springer, Esquire and David M. Sborz, Esquire 

of Andrews & Springer LLC, Wilmington, Delaware; Randall J. Baron, Esquire and 

David T. Wissbroecker, Esquire of Robbins Geller Rudman & Dowd LLP, San 

Diego, California; Christopher H. Lyons, Esquire of Robbins Geller Rudman & 

Dowd LLP, Nashville, Tennessee; and W. Scott Holleman, Esquire of Johnson 

Fistel, LLP, New York, New York, Attorneys for Plaintiff.

Kevin R. Shannon, Esquire, Christopher N. Kelly, Esquire and Daniel M. Rusk, 

Esquire of Potter Anderson & Corroon LLP, Wilmington, Delaware and Walter C. 

Carlson, Esquire, Nilofer I. Umar, Esquire, and Elizabeth Y. Austin, Esquire of 

Sidley Austin LLP, Chicago, Illinois, Attorneys for Defendant.

SLIGHTS, Vice Chancellor
1

In early 2016, West Corporation (“West” or the “Company”) began to 

consider strategic alternatives, including a possible sale of the Company or its 

business segments. The Company initiated a formal sales process later that year and 

continued with that process through the spring of 2017. Ultimately, West entered 

into an Agreement and Plan of Merger (the “Merger Agreement”) with affiliates of 

Apollo Global Management on May 9, 2017, wherein Apollo agreed to purchase 

West’s outstanding stock at $23.50 per share in cash (the “Merger”). On June 27, 

2017, the Company distributed its Schedule 14A Proxy Statement (the “Proxy”) to 

its stockholders in which it solicited their votes in favor of the Merger. One month 

later, the overwhelming majority of West’s stockholders voted to approve the 

Merger and it was consummated shortly thereafter.

On July 19, 2017, Plaintiff, Mark Lavin, served a demand upon West to 

inspect its books and records under Section 220 of the Delaware General 

Corporation Law (“DGCL”).

1

 In his demand, Lavin stated that his purpose was to 

“determine whether wrongdoing and mismanagement had taken place” in 

connection with the Merger and “to investigate the independence and 

disinterestedness” of the Company’s directors.2 Soon after, West rejected Lavin’s 

 

1 8 Del. C. § 220.

2

JX 3 (Lavin’s Demand to Inspect Books and Records) at 7.
2

demand for failure to state a proper purpose for inspection and because the demand 

was overly broad. 

Lavin filed his Verified Complaint to Compel Inspection on July 27, 2017 (the 

day after the stockholders voted to approve the Merger). In its answer to the 

Complaint, West reiterated its position that inspection was not justified because 

Lavin could not, as a matter of law, articulate a credible basis of wrongdoing against 

West’s board of directors (the “Board”). In this regard, West maintained that not 

only did the Board behave reasonably in recommending the Merger as a matter of 

law, West’s disinterested stockholders approved that recommendation in a fully 

informed, uncoerced vote. According to West, under the so-called Corwin doctrine,3

the stockholder vote “cleansed” any purported breaches of fiduciary duty and, 

therefore, Lavin may challenge the Merger only on grounds of waste (which he has

not stated as a basis for inspection).

4

The parties agreed that the trial of this matter would be limited to a “paper 

record” without deposition or live testimony. After carefully reviewing the evidence 

and the arguments of counsel, I conclude in this post-trial opinion that Lavin has 

demonstrated, by a preponderance of the evidence, a credible basis from which the

 

3 Corwin v. KKR Fin. Hldgs. LLC, 125 A.3d 304 (Del. 2015).

4

JX 4 (West’s Response to Lavin’s Demand) at 3.
3

Court can infer that wrongdoing related to the Merger may have occurred. In so 

finding, I reject, as a matter of law, West’s argument that Corwin will stand as an 

impediment to an otherwise properly supported demand for inspection under 

Section 220. Any contrary finding would invite defendants improperly to draw the 

court into adjudicating merits defenses to potential underlying claims in order to 

defeat otherwise properly supported Section 220 demands. Equally compelling, the 

Court should not (and will not here) prematurely adjudicate a Corwin defense when 

to do so might deprive a putative stockholder plaintiff of the ability to use 

Section 220 as a means to enhance the quality of his pleading in a circumstance 

where precise pleading, under our law, is at a premium. 

Judgment is entered for Lavin. West shall produce for inspection the books 

and records designated herein as essential to Lavin’s pursuit of his proper purpose.

I. FACTUAL BACKGROUND

The Court held trial on a paper record on October 9, 2017. I have drawn the 

facts from the trial exhibits and those matters of which the Court may take judicial 

notice. Unless noted otherwise, the following facts were proven by a preponderance 

of the evidence.
4

A. The Parties 

Plaintiff, Mark Lavin, is a West shareholder who has continuously owned his 

West common stock since at least June 1, 2017.5 Defendant, West, is a Delaware 

corporation with its principal place of business in Omaha, Nebraska. 

B. West’s Business

West is a global provider of communication and network infrastructure 

services. It provides voice and data services through four “reporting segments”: 

Unified Communications Services (“UC”), Safety Services, Interactive Services and 

Specialized Agent Services.6 UC has two separate “operating segments”: 

(1) Unified Communications (“UCaaS”) and Telecom; and (2) Conferencing.

7

UC is West’s largest reporting segment, accounting for approximately 62% of 

the Company’s total revenue and 61% of its total operating income.

8

 Of UC’s two 

operating segments, Conferencing is by far the largest, accounting for approximately 

 

5 Lavin attached to his Verified Complaint a Charles Schwab statement showing his 

holdings as of June 1, 2017, which included 3,320 shares of West common stock. JX 3

(Lavin’s Demand to Inspect Books and Records). West does not dispute that Lavin is and 

has been a stockholder at all relevant times.

6

JX 5 (West Sched. 14A Definitive Proxy Statement filed June 27, 2017 (the “Proxy”)) 

at 19.

7 See JX 16 (West Form 8-K filed on Feb. 19, 2016) at 15, 18; JX 6 (Wells Fargo Equity 

Research on West Corporation dated Feb. 28, 2017 (“Wells Fargo Report”)).

8

JX 5 (Proxy) at 19; JX 6 (Wells Fargo Report); JX 16 (West Form 8-K) at 15, 18.
5

50% of West’s overall revenue.9 The Conferencing segment, not surprisingly, 

concentrates on facilitating audio, webcast and other conferencing capabilities in

virtual environments, while the UCaaS segment provides direct IP connectivity and 

internet platforms.10 

West’s remaining reporting segments, discussed below, range between 

approximately 10% and 12% of West’s annual revenue.11 The Safety Services 

segment includes, inter alia, “next generation 9-1-1,” which routes a 9-1-1 caller’s 

physical location to specific public-safety answering points.12 The Interactive 

Services segment includes outbound notification systems (voice, text/SMS and 

chat), inbound speech solutions, cloud contract center technologies, and web, mobile 

and professional services.13 Lastly, the Specialized Agent Services segment includes 

healthcare advocacy services, cost management services and revenue generation 

services.14 

 

9

JX 6 (Wells Fargo Report). It appears from the Proxy that the UC Segment, and 

Conferencing in particular, was not doing as well as expected towards the end of 2016, 

which was about the time that West announced it was pursuing strategic alternatives. JX 5 

(Proxy) at 30.

10 JX 16 (West Form 8-K) at 19.

11 JX 16 (West Form 8-K) at 5, 28, 34, 40.

12 JX 16 (West Form 8-K) at 32.

13 JX 16 (West Form 8-K) at 33–38.

14 JX 16 (West Form 8-K) at 39–46.
6

C. West’s Major Shareholders and Board Composition

Mary West and Gary West (the “Founders”) established West in 1986. The 

Company was publicly traded from 1996 until 2006, when it completed a leveraged 

recapitalization sponsored by two private equity funds, Thomas H. Lee Partners, L.P. 

(“TH Lee”) and Quadrangle Group LLC (“Quadrangle”).

15

 Thereafter, in October 

2006, TH Lee and Quadrangle purchased the Company’s publicly traded securities 

for cash in a going-private transaction.

16

 As of 2013, TH Lee and Quadrangle 

collectively owned approximately 70% of West’s common stock. The Company

went public for a second time in March 2013.

17

 As a result of this public offering, 

TH Lee’s holdings were diluted to 43.5% and Quadrangle’s holdings were diluted

to 9.1%.

18

At the same time TH Lee and Quadrangle took the Company public in 2013, 

they entered into a stockholder agreement with the Founders and the Company, 

whereby the parties agreed that if Quadrangle maintained at least 25% of the shares 

it held as of the March 2013 IPO date, then it would retain the right to elect one 

 

15 JX 17 (West’s Form 10-K Annual Report filed on Feb. 16, 2017) at 3. In this Opinion, 

TH Lee and Quadrangle are used to refer both to those specific entities and those entities 

when acting in combination with their affiliates.

16 JX 17 (West’s Form 10-K Annual Report filed Feb. 16, 2017) at 3.

17 JX 17 (West’s Form 10-K Annual Report filed Feb. 16, 2017) at 4.

18 JX 9 (West’s Prospectus filed on Mar. 22, 2013) at 108.
7

director.19 For its part, TH Lee bargained for a right to elect up to four directors so 

long as it held more than 50% of the shares held as of the IPO date.20 Together, 

TH Lee and Quadrangle reserved the right to elect half of West’s ten-member 

board.

21

Leading up to the Merger, the Board was comprised of Lee Adrean, 

Thomas B. Barker (West’s Chairman and CEO), Donald M. Casey, Jr., Anthony J. 

DiNovi, Paul R. Garcia, Laura A. Grattan, Jeanette A. Horan, Michael A. Huber, 

Diane E. Offereins and Gregory T. Sloma.

22 Quadrangle designated Huber, its 

president and managing principal. TH Lee designated DiNovi and Grattan, its copresident and managing director, respectively. West has represented in its SEC 

filings that Sloma and Garcia are independent directors, but they were designated to 

 

19 JX 7 (Amended and Restated S’holder Agreement (“S’holder Agreement”)) at 2 (“For so 

long as the Quadrangle Investors own at least twenty-five percent (25%) of the Shares 

listed as being owned by the Quadrangle Investors on Schedule I, the Quadrangle Investors 

will be entitled to designate one (1) director.”).

20 JX 7 (S’holder Agreement) at 3 (“For so long as the THL Investors own at least five 

percent (5%) of the Shares listed as being owned by the THL Investors on Schedule I, the 

THL Investors will be entitled to designate a number of directors as determined under 

Section 2.1.3.”); id. § 2.1.3 (“The initial number of THL Directors is four (4), but the 

number of directors that THL Investors are entitled to designate will automatically be 

reduced effective at and after such time as the THL Investors cease to hold Shares 

constituting the requisite percentage of the Shares listed as being owned by the 

THL Investors [on the following schedule] . . . [If THL maintains more than 50% of its 

holdings, it may designate 4 directors].”).

21 JX 7 (S’holder Agreement) at 2–3.

22 JX 5 (Proxy) at 58–59; JX 8 (Annual Meeting Proxy) at 6–9.
8

the Board just before the 2013 IPO when TH Lee and Quadrangle controlled the 

Company.

23

According to West, Nasdaq Marketplace Rule 5605(b)(1) required the Board

to be comprised of a majority of independent directors in order for West to remain a 

“non-controlled company,” which ostensibly was its status at the time of the 

Merger.

24

 Although West claims that the majority of the Board was independent,25

it concedes that TH Lee and Quadrangle could still exercise their contractual rights 

under the Stockholder Agreement to appoint five of the Company’s ten directors

throughout the sales process and at the time of the Merger.

26

As TH Lee’s and Quadrangle’s investment in West approached its eight-year 

mark, they began to liquidate their holdings. Starting in February 2014, the funds 

initiated a plan to reduce their holdings that eventually included two secondary 

offerings, one in March 2015 and the other in June 2015.

27

 After each offering, 

 

23 JX 9 (West’s Prospectus filed on Mar. 22, 2013) at 10, 80.

24 See, e.g., JX 10 (West’s March 2015 Secondary Offering Prospectus Supplement) at 

S-14; JX 24 (West’s Form 8-K filed on Dec. 14, 2015).

25 See Def. West’s Reply Br. 11–12 (“West’s Board determined that six of its ten Board 

members (i.e., all of the directors except for West’s CEO, the two THL designees, and the 

one Quadrangle designee) were independent.”).

26 Tr. at 81:1–6 (“[W]e don’t dispute this. I mean, this provides that TH Lee has the right 

to appoint up to four individuals on West’s board of directors.”).

27 JX 10 (March 2015 Secondary Offering Prospectus); JX 11 (June 2015 Secondary 

Offering Prospectus).
9

West’s stock price dropped substantially.28 Despite selling a large percentage of 

their holdings, TH Lee and Quadrangle still held enough stock to maintain their full 

rights to appoint directors under the Shareholder Agreement.

29

D. West Considers Strategic Alternatives, Evaluates Bidders and Selects 

 Apollo

In September 2015, West and TH Lee began to receive unsolicited 

expressions of interest from third parties regarding possible acquisitions of one or 

more of the Company’s business segments.

30 The following year, in November 

2016, the Board announced that it was considering strategic transactions. According 

to the Proxy, from September 2015 through December 2016, at least thirteen third 

parties approached West or TH Lee expressing an interest in acquiring either one or 

more business segments or the whole Company.31 Indeed, during this time, West 

received an indication of interest for each segment of the Company.32

 

28 JX 12 (Yahoo! Finance Chart of West Stock Price from March 25, 2013 to September 5, 

2017 (“Yahoo! Finance Chart”)).

29 JX 5 (Proxy) at 107; JX 7 (S’holder Agreement) at 2–3. As of the date of the Merger, 

TH Lee owned approximately 21.3% of the Company’s shares (18,176,133 shares), and 

Quadrangle owned approximately 4.4% of its outstanding shares (3,781,961 shares). See 

also JX 8 (Annual Meeting Proxy) at 5.

30 JX 5 (Proxy) at 28–32.

31 JX 5 (Proxy) at 28–32.

32 E.g., JX 5 (Proxy) at 32 (“With respect to the Preliminary Indications of Interest 

contemplating a Potential Segment Acquisition, Party A’s Preliminary Indication of 

Interest contemplated an acquisition of the Safety Services segment . . . . Party G’s 
10

West selected Centerview as its financial advisor in April 2016. Centerview’s 

engagement provided for a contingency fee arrangement whereby it would receive 

a modest flat fee for its work but could earn up to $28 million if the Company 

consummated the Merger.

33

 The Proxy indicates that Centerview contacted fiftyfive potential bidders and that West executed confidentiality agreements with thirty 

different parties.34

By January 2017, the Board instructed Centerview and management to 

“focus” on a sale of the Company as a whole.

35

 After the Board decided to prioritize 

a whole-company sale, two bidders, “Party H” and “Party L,” made an offer to 

purchase certain business segments for substantial consideration. Specifically, 

Party H offered between $2.4 billion and $2.6 billion for all segments excluding the 

 

Preliminary Indication of Interest contemplated an acquisition of the Interactive Services 

segment . . . . Party J’s Preliminary Indication of Interest contemplated an acquisition of 

the Specialized Agent Services segment . . . . Party K’s Preliminary Indication of Interest 

contemplated an acquisition of the Unified Communications Services segment for 

$2.3 billion.”) (emphasis supplied). The Proxy indicates that the Company received 

several more indications of interest and bids not specifically described therein. JX 5 

(Proxy) at 32–35.

33 JX 5 (Proxy) at 56 (“In connection with Centerview’s services as the financial advisor 

to the Board, the Company has agreed to pay Centerview an estimated aggregate fee of 

$28 million, $2 million of which was payable upon the rendering of Centerview’s opinion 

and the remainder of which is payable contingent upon consummation of the 

Transaction.”).

34 JX 5 (Proxy) at 35.

35 JX 5 (Proxy) at 33.
11

UC segment.36 Party L made an offer to purchase the Interactive Services and Safety 

Services segments, along with assets from the Specialized Agent Services segment,

for $2.36 billion.37

According to the Proxy, West granted only Apollo, Party H, Party L and one 

other party access to its data room.38 Thereafter, the Board began negotiating 

exclusively with Apollo.

39 On May 9, 2017, West and Apollo signed the Merger 

Agreement, wherein Apollo agreed to acquire the Company for $23.50 per share, 

which equates to approximately $2 billion in cash or $5.2 billion in enterprise value 

taking into account West’s long-term debt of approximately $3.2 billion.

40

 

The Merger Agreement contained a no-shop provision with a fiduciary out 

that at least arguably made it more difficult for a sale of the Company’s segments to 

 

36 JX 5 (Proxy) at 35.

37 JX 5 (Proxy) at 35.

38 It appears from the Proxy that Apollo, Party H and Party F (together with “Party I”) were 

provided access to the data room on January 21, 2017, and Party L was provided access on 

March 2, 2017. JX 5 (Proxy) at 33–34. 

39 JX 5 (Proxy) at 36–39.

40 JX 5 (Proxy) at 28, 41; JX 17 (West’s Form 10-K Annual Report filed Feb. 16, 2017) 

at 29. TH Lee, Quadrangle and the Founders entered into voting agreements with Apollo, 

obligating them to “vote their shares of West common stock in favor of the proposal to 

adopt the merger agreement. As of the close of business on the record date, these 

stockholders and their affiliates beneficially owned, in the aggregate, approximately 46% 

of our common stock.” JX 5 (Proxy) at 4, 110.
12

occur.41 According to the Merger Agreement, the Board could terminate the deal

with Apollo in favor of another transaction only if it received a “Superior Proposal,”

which was defined as a proposal to acquire at least 70% of West’s assets, revenue or 

shares.42 Because West’s largest segment, the UC segment, accounted for

approximately 62% of West’s revenue, the no-shop could have shut out an offer for 

one or more segments even if the offer was substantially greater than Apollo’s.

West filed the Proxy soliciting votes in favor of the Merger on June 27, 2017.

43

 

Within a few days, five putative class action complaints were filed in the 

U.S. District Court for the District of Nebraska, primarily alleging federal securities 

law violations and claiming that the Proxy contained material omissions.44 West 

responded by filing a supplement to the Proxy thereby mooting the disclosure claims

 

41 JX 5 (Proxy) at 8, 85–87.

42 JX 5 (Proxy) at 8, 85–87.

43 JX 5 (Proxy).

44 Scarantino v. West Corp., No. 4:17-cv-03080 (D. Neb.); Wyant v. West Corp., 4:17-cv03081 (D. Neb.); Wilson v. West Corp., Case No. 8:17-cv-00228 (D. Neb.); Bushansky v. 

West Corp., Case No. 4:17-cv-03083 (D. Neb.); Katz v. West Corp., Case No. 4:17-cv03084 (D. Neb.) (the “Nebraska Actions”).
13

in advance of the stockholder vote.

45

 On July 26, 2017, approximately 86% of the 

outstanding shares voted and, of those, 99.8% voted in favor of the Merger.46

In connection with the transaction, Barker (the Chairman and CEO) was set 

to receive a $19-million “golden parachute” comprised of a $7.5 million cash award 

and $11.5 million for accelerated vesting of restricted stock, in addition to another 

$9 million in cash for vested stock options and notional shares.

47 West’s nonemployee directors were set to receive a $100,000 cash award in addition to 

accelerated vesting of restricted stock units worth approximately $100,000.48 West’s 

other high-level officers also were to receive “golden parachutes.”

49

 

E. Lavin Makes a Section 220 Demand

On July 19, 2017, Lavin sent his demand to inspect West’s books and records 

under Section 220 of the DGCL. His stated purpose was to “determine whether 

 

45 JX 25 (West Form 8-K filed on July 19, 2017). It is not clear from the record whether 

the Nebraska Actions are pending or, if resolved, how they were resolved. 

46 JX 13 (West Form 8-K filed July 27, 2017) at 2. The Merger closed on October 10, 

2017. West has not challenged Lavin’s standing to pursue his Section 220 claim.

47 JX 5 (Proxy) at 63 (showing Golden Parachute Payment of $19,187,530); id. at 59

(showing Executive Officer Vested Equity Awards).

48 JX 5 (Proxy) at 58. DiNovi, Grattan and Huber, TH Lee’s and Quadrangle’s designees, 

were excluded from these awards. Id.

49 JX 5 (Proxy) at 63 (listing “Golden Parachute Payments” to four officers other than 

Barker). I note that final argument in this case was presented the day before the Merger 

closed so the record does not reflect whether any of the golden parachute payments were 

actually made as scheduled.
14

wrongdoing and mismanagement had taken place” in connection with the Merger 

and “to investigate the independence and disinterestedness” of the Company’s 

directors.50 Lavin listed thirteen categories of books and records for inspection. 

West rejected the demand on July 26, 2017, on the grounds that Lavin had not 

articulated a credible basis for suspecting wrongdoing and had made an overbroad 

inspection demand in any event.

51

F. Procedural History

On July 27, 2017, Lavin filed a Verified Complaint to Compel Inspection of 

Books and Records under Section 220. The parties stipulated to a trial on a paper 

record,

52 and the Court conducted that trial on October 9, 2017. This is the Court’s 

post-trial decision.

II. ANALYSIS

Lavin argues that he has presented sufficient evidence from which the Court 

can infer that West’s directors, for self-interested reasons, favored a less valuable

sale of the Company over a more valuable sale of its parts. Specifically, he contends 

that the evidence supports an inference that (1) the Board knew that the most valuemaximizing option was a sale of the Company’s business segments; (2) a more 

 

50 JX 3 (Lavin’s Demand to Inspect Books and Records) at 7.

51 JX 4 (West’s Response to Lavin’s Demand) at 2–5.

52 Stipulation and Scheduling Order (Aug. 17, 2017).
15

valuable sale of the segments was possible given that multiple bidders made 

substantial offers for each of West’s segments; and (3) unlike a sale of the Company, 

a sale of segments would not provide personal benefits for the directors and senior 

management, nor would it provide TH Lee and Quadrangle with much needed

liquidity.

53

 Lavin also argues that Centerview suffered from conflicts of interest that 

caused it improperly to favor the deal with Apollo. This, he contends, provides at 

least a credible basis to infer that West’s directors and officers may have favored an 

inadequate bidder, and thus may have breached their Revlon duties, possibly in bad 

faith.

54

Lavin also argues that the Board failed to disclose material information in the 

Proxy. Specifically, he alleges that the Proxy omits financial growth profiles of 

West’s operating segments, sum-of-the-parts analyses that Centerview may have

performed, relevant relationships that certain directors have with TH Lee and 

Quadrangle and the “seriousness” of the partial-company/segment bidders. Lavin 

 

53 As is common, the “liquidity” argument reduces to a contention that the private equity

funds were nearing their investment horizons and pursued a quick liquidity event that 

would take out their entire investment in West rather than piecemeal sales of segments that 

would take more time to close and may cause the funds to be extended beyond their 

horizons. 

54 See In re Novell, Inc. S’holder Litig., 2013 WL 322560, at *9–10 (Del. Ch. Jan. 3, 2013) 

(holding that the plaintiff stated a claim that the defendants breached their Revlon duties in 

bad faith); Mills Acq. Co. v. Macmillan, Inc., 559 A.2d 1261, 1281 (Del. 1989) (observing 

that an “auction was clandestinely and impermissibly skewed in favor” of management’s 

preferred bidder).
16

raises these disclosure allegations as an independent basis for inspection and as a 

response to West’s Corwin defense.

West responds that Lavin has failed to state a credible basis from which the 

Court can infer that (1) the directors approved the Merger for self-interested reasons 

or (2) Centerview suffered from disabling conflicts of interest. In framing its 

argument, West separates Lavin’s disclosure allegations from his process 

allegations. As to the disclosure allegations, West argues that our courts routinely 

find that the kinds of “tell me more,” “tell me why,” or “tell me more about why” 

disclosure allegations identified by Lavin fail to state actionable disclosure claims. 

As to the process allegations, West argues that Corwin applies because a majority of 

disinterested, informed, uncoerced stockholders approved the Merger. According to 

West, this should end the inquiry. If the Court looks beyond the Corwin “cleansing,”

West contends that the Proxy clearly reveals that the deal process was sound and not 

tainted by conflicts of interest. 

For reasons discussed below, I am satisfied that Lavin has presented a credible 

basis from which the Court can infer that West’s directors and officers may have 

breached their fiduciary duties in favoring a sale of the Company as opposed to a 

sale of its segments. In this regard, I reject West’s argument that “Corwin provides 

the framework” for determining whether Lavin has met his burden to justify 
17

inspection.55 As for the substance of Lavin’s claims of wrongdoing, the evidence he 

presented in support of his process claims clears the very low bar set by the “credible 

basis” standard of proof.56 His demand is too broad, however, and must be limited 

to the books and records that are necessary and proper to assist him in pursuing his 

investigation. 

A. The Section 220 Standard 

The standard for evaluating a demand for books and records under 

Section 220 is well settled. A stockholder of a Delaware corporation may inspect

the corporation’s books and records for any “proper purpose” reasonably related to 

the stockholder’s “interest as a stockholder.”57 The desire to investigate

 

55 Def. West’s Opening Br. 24; Def. West’s Answering Br. 5 (“[T]he heightened Corwin

standard provides the relevant framework under which to evaluate Plaintiff’s process-based 

claims.”).

56 As noted, Lavin raised his disclosure claims as both an independent basis for inspection 

and as a response to West’s Corwin argument. See Pl. Lavin’s Answering Br. 1. Because 

I find that Corwin does not apply to bar the claim for inspection, and that Lavin has 

presented a credible basis to infer wrongdoing related to the Merger process, I will not 

consider his disclosure allegations further. For this reason, I likewise will not consider 

West’s defenses to the disclosure allegations beyond observing that they improperly seek 

to immerse the Court in merits defenses in what is quintessentially a summary proceeding. 

See Def. West’s Opening Br. 16–23. 

57 8 Del. C. § 220(b) (“A proper purpose shall mean a purpose reasonably related to such 

person’s interest as a stockholder.”). West does not dispute that Lavin has satisfied the 

“form and manner requirements.” See Amalgamated Bank v. Yahoo! Inc., 132 A.3d 752,

775–76 (Del. Ch. 2016) (discussing “form and manner” requirements).
18

mismanagement or wrongdoing is a proper purpose.58 To prove that the stated 

purpose is justified, the stockholder must demonstrate, by a preponderance of the 

evidence, “a credible basis from which the court can infer that mismanagement, 

waste or wrongdoing may have occurred.”

59

 The “credible basis” standard is the 

lowest burden of proof known in our law; it merely requires that the plaintiff present 

“some evidence” of wrongdoing.60 “A plaintiff seeking inspection must also prove 

that ‘each category of books and records requested is essential and sufficient to [its] 

stated purpose.’”61 

B. Corwin Will Not Impede an Otherwise Properly Supported Demand 

 for Inspection

As stated, West maintains that Lavin must overcome its Corwin defense to 

prevail on his inspection demand because the Merger was approved by a fully 

informed, uncoerced vote of West’s disinterested stockholders. For the reasons 

discussed below, I disagree. To explain why Corwin does not apply in the 

 

58 Seinfeld v. Verizon Commc’ns, Inc., 909 A.2d 117, 121 (Del. 2006) (“It is well

established that a stockholder’s desire to investigate wrongdoing or mismanagement is a 

‘proper purpose.’”).

59 Id. at 118 (internal quotation marks omitted).

60 Id. at 123 (“Although the threshold for a stockholder in a section 220 proceeding is not 

insubstantial, the ‘credible basis’ standard sets the lowest possible burden of proof.”).

61 Henry v. Phixios Hldgs., Inc., 2017 WL 2928034, at *11 (Del. Ch. July 10, 2017) 

(quoting Thomas & Betts Corp. v. Leviton Mfg. Co., 681 A.2d 1026, 1035 (Del. 1996)).
19

Section 220 context, it is helpful first to revisit Corwin, this Court’s faithful 

application of the doctrine and the pleading burdens it imposes upon the plaintiff 

who seeks to challenge a stockholder-approved merger or tender offer. With that 

context in mind, the legal and policy reasons for rejecting West’s Corwin argument 

in this proceeding become clear.62

In Corwin, our Supreme Court clarified the “long-standing” principle that a 

voluntary, fully informed vote of disinterested stockholders to approve a transaction

not involving a controlling stockholder will trigger the business judgment rule 

standard of review.

63

 This now-settled doctrine recognizes a sound policy 

undergirding our corporate law: it is right to ratchet-down more intrusive judicial 

review, in order “to avoid the uncertainties and costs of judicial second-guessing, [in 

those instances where] the disinterested stockholders have had the free and informed 

chance to decide on the economic merits of a transaction for themselves.”64 Given 

 

62 I assume in this Opinion, without deciding, that the Company has standing to raise a 

Corwin defense in this proceeding even though the defense is perhaps more properly 

viewed as belonging to the Company’s board of directors. Neither party has raised the 

standing issue, so I decline to consider it further.

63 125 A.3d at 306, 312–14 & n.19.

64 Id. at 313; see also id. (“When the real parties in interest—the disinterested equity 

owners—can easily protect themselves at the ballot box by simply voting no, the utility of 

a litigation-intrusive standard of review promises more costs to stockholders in the form of 

litigation rents and inhibitions on risk taking than it promises in terms of benefits to 

them.”); J. Travis Laster, The Effect of Stockholder Approval on Enhanced Scrutiny, 

40 Wm. Mitchell L. Rev. 1443, 1457 (2014) (commenting that “a compromised board can 

substitute the stockholders as the necessary qualified decision maker and, thereby, restore 
20

the overwhelming stockholder vote approving the Merger, and the full embrace 

Corwin has received by our courts, Lavin is wise to expect that West will raise a 

Corwin defense should he elect to challenge the transaction in a plenary action. 

Mindful of the challenge(s) to come, Lavin has invoked Section 220 as a 

means to investigate his potential claims before he launches his formal complaint. 

Here again, he has proceeded wisely. Following Corwin, commentators and litigants 

questioned whether the stockholder plaintiff or the fiduciary defendants bore the 

burden at the pleading stage to demonstrate that the stockholder vote was (or was 

not) fully informed and uncoerced.

65

 Chancellor Bouchard recently provided the 

definitive answer to the Corwin pleading burden question: the stockholder plaintiff 

bears the burden of pleading facts that “identify a deficiency in the operative 

disclosure document.”66 As Chancellor Bouchard explained, allocating the pleading 

burden to the plaintiffs is “far more sensible” because the contrary rule would put 

 

the protections of the business judgment rule” and that it is appropriate that “a court should 

take into account and defer to an uncoerced endorsement from fully informed, disinterested 

stockholders.”). 

65 In re Solera Hldgs., Inc. S’holder Litig., 2017 WL 57839, at *7–8 (Del. Ch. Jan. 5, 2017).

66 Id. See also van der Fluit v. Yates, 2017 WL 5953514, at *7 (Del. Ch. Nov. 30, 2017) 

(“[A] plaintiff challenging the decision to approve a transaction must first identify a 

deficiency in the operative disclosure document.”) (quoting In re Solera Hldgs., 2017 

WL 57839, at *8).
21

defendants in the “proverbially impossible position of proving a negative.”67 Thus, 

should the time come when Lavin must answer West’s Corwin defense, he will be 

obliged to do so with well-pled facts in his complaint that support a reasonable 

inference that the stockholder vote was uninformed or coerced. This is no easy 

task.68 

For over twenty years, Delaware courts have encouraged stockholders to use 

the “tools at hand” (e.g., Section 220) to gather information before filing complaints 

that will be subject to heightened pleading standards.69 Although our courts 

 

67 In re Solera Hldgs., 2017 WL 57839, at *8 (citing Harbor Fin. P’rs v. Huizenga, 

751 A.2d 879, 890 n.36 (Del. Ch. 1999). Chancellor Bouchard also observed that “[t]he 

logic of [placing the pleading burden on plaintiffs] is borne out by the reality that this is 

how ratification defenses in corporate sale transactions have been litigated in practice since 

Corwin was decided, including in this case.” Id.

68 See Matthew D. Cain, Jill E. Fisch, Steven Davidoff Solomon & Randall S. Thomas, 

The Shifting Tides of Merger Litigation, 71 Vand. L. Rev. (forthcoming 2018) (noting that 

Corwin, among other decisions, has “made the prosecution of merger litigation cases more 

difficult”). In the wake Corwin, this court has held stockholder plaintiffs to their pleading 

burden in a manner that reflects fealty to the laudable policy at the heart of the doctrine it 

solidified. See, e.g., In re Volcano Corp. S’holder Litig., 143 A.3d 727, 747 (Del. Ch. 

2016) (granting motion to dismiss and noting that “[b]ecause stockholders representing a 

majority of Volcano’s outstanding shares approved the Merger, Plaintiffs must plead facts 

from which it reasonably can be inferred that those stockholders were interested, coerced, 

or not fully informed in accepting the Tender Offer to avoid application of the business 

judgment rule.”), aff’d, 156 A.3d 697 (TABLE); Larkin v. Shah, 2016 WL 4485447, at *20 

(Del. Ch. Aug. 25, 2016) (dismissing complaint for failure to plead that the stockholder 

vote was coerced or uninformed); In re Merge Healthcare Inc., 2017 WL 395981, at *13

(Del. Ch. Jan. 30, 2017) (same); In re Solera Hldgs., 2017 WL 57839, at *13 (same); 

Chester Cty. Ret. Sys. v. Collins, 2016 WL 7117924, at *3 (Del. Ch. Dec. 6, 2016) (Order 

Granting Motions to Dismiss) (same). 

69 E.g., King v. VeriFone Hldgs., Inc., 994 A.2d 354, 356 (Del. Ch. 2010) (“For years, our 

Supreme Court has made clear that derivative plaintiffs should seek books and records and 
22

primarily direct that encouragement (or admonition) to stockholders who intend to 

file derivative complaints where they will allege demand futility, the direction is 

equally applicable to stockholders who intend to file class action suits challenging 

transactions approved by a shareholder vote.70 Indeed, it would be naïve to believe, 

in most instances, that the stockholder plaintiff will not face significant challenges

to meet her pleading burden in anticipation of a Corwin defense if all she has in hand 

to prepare her complaint are the public filings of the company whose board of 

directors she proposes to sue.71 That is precisely the dynamic that caused our courts 

 

otherwise conduct an adequate investigation into demand excusal before rushing off to file 

a derivative complaint.”), rev’d on other grounds, 12 A.3d 1140 (Del. 2011); Seinfeld, 

909 A.2d at 120 (“The rise in books and records litigation is directly attributable to this 

Court’s encouragement of stockholders, who can show a proper purpose, to use the ‘tools 

at hand’ to obtain the necessary information before filing a derivative action.”); Sec. First 

Corp. v. U.S. Die Casting & Dev. Co., 687 A.2d 563, 571 (Del. 1997) (“[A] Section 220 

proceeding may serve a salutary mission as a prelude to a derivative suit.”); Rales v. 

Blasband, 634 A.2d 927, 934 n.10 (Del. 1993) (suggesting that stockholders use, inter alia, 

Section 220 as a means to gather information in anticipation of a derivative action). 

70 See Compaq Comp. Corp. v. Horton, 631 A.2d 1, 4 (Del. 1993) (holding that Section 220 

may be employed by a stockholder investigating a direct claim just as readily as when the 

stockholder is investigating a derivative claim). To be sure, there are timing challenges 

posed in the context of utilizing Section 220 in aid of direct claims challenging a merger 

or tender offer transaction that typically do not exist in the derivative context. Even so, 

Section 220 still can serve its purpose in the merger or tender offer context if the 

stockholder moves promptly. See e.g., Cutlip v. CBA Int’l, Inc. I, 1995 WL 694422, at *2–

3 (Del. Ch. Oct. 27, 1995) (holding that plaintiffs did not lose standing to pursue a 

Section 220 action where they filed suit before the merger closed); Deephaven Risk Arb 

Trading Ltd. v. UnitedGlobalCom, Inc., 2005 WL 1713067, at *7–8 (Del. Ch. July 13, 

2005) (same).

71 See Joel Edan Friedlander, Vindicating the Duty of Loyalty: Using Data Points of 

Successful Stockholder Litigation as a Tool for Reform, 72 Bus. Law. 623, 644–48 (2017) 

(addressing concerns that post-Corwin complaints often suffer from a lack of basic facts 
23

to encourage use of the “tools at hand” in the derivative context. And it is precisely 

the reason this court should encourage stockholders, if feasible, to demand books 

and records before filing their complaints when they have a credible basis to suspect 

wrongdoing in connection with a stockholder-approved transaction and good reason 

to predict that a Corwin defense is forthcoming.

Moreover, the notion that the court would engage with Corwin, and all that it 

entails, in a summary Section 220 proceeding has little to commend it as a matter of 

procedure, at least in the view of this trial judge. Simply stated, Corwin does not fit 

within the limited scope and purpose of a books and records action in this court.72 

Our law is settled that stockholders seeking books and records under Section 220 for 

the purpose of investigating mismanagement need not prove that wrongdoing or 

mismanagement actually occurred.

73

 Thus, when a stockholder demands inspection 

 

relating to the challenged transaction or attendant disclosures). I acknowledge that the 

author ultimately concludes that Section 220 is a “pale substitute” for expedited discovery 

in most deal litigation. Id. at 648. Even if that is so, as the poet John Heywood exhorted, 

“somewhat is better than nothyng (sic).” John Heywood, Dialogue of Proverbs (1546). 

72 Cf. Salberg v. Genworth Fin., Inc., 2017 WL 3499807, at *5–6 (Del. Ch. July 27, 2017) 

(finding in a Section 220 proceeding that Corwin could not form the basis for challenging

the “colorability” of a claim under the Garner v. Wolfinbarger analysis).

73 See Thomas & Betts, 681 A.2d at 1031 (“[Stockholders] are not required to prove by a 

preponderance of the evidence that waste and management are actually occurring.”); 

Sec. First, 687 A.2d at 568 (same); Yahoo!, 132 A.3d at 780 (“To state what should be 

obvious, the existence of a credible basis to suspect possible wrongdoing sufficient to 

warrant further investigation does not mean that wrongdoing actually occurred. Even in 
24

as a means to investigate wrongdoing in contemplation of a class or derivative 

action, Delaware courts generally do not evaluate the viability of the demand based 

on the likelihood that the stockholder will succeed in a plenary action.

74 In the rare 

circumstances where inspection rights have been denied based on an assessment of 

the merits of the claim the stockholder seeks to investigate, the courts have 

emphasized either that the claim was simply not “justiciable,”75 or that the claim on 

 

Disney, where the complaint survived a motion to dismiss, the defendants ultimately 

prevailed.”).

74 Wolst v. Monster Beverage Corp., 2014 WL 4966139 at *1–2 (Del. Ch. Oct. 3, 2014) 

(“A potentially viable affirmative defense to an anticipated derivative claim will not 

necessarily defeat a books and records effort. Sometimes developing the record to 

withstand possible affirmative defenses requires more effort than is practicable for a books 

and records action.”); La. Mun. Police Empls.’ Ret. Sys. v. Countrywide Fin. Corp., 

2007 WL 2896540, at *12 (Del. Ch. Oct. 2, 2007) (“[The defendant company] seeks to 

litigate the ultimate issue in a possible future derivative suit that might eventually be filed 

by [the plaintiff]. This is neither the time nor the procedural setting to address that issue.”); 

Amalgamated Bank v. UICI, 2005 WL 1377432, at *2 (Del. Ch. June 2, 2005) (“The 

potential availability of affirmative defenses to withstand fiduciary duty claims cannot 

solely act to bar a plaintiff under Section 220.”); Marmon v. Arbinet-Thexchange, Inc., 

2004 WL 936512, at *6 (Del. Ch. Apr. 28, 2004) (“[Allowing merits-based defenses] 

would turn on its head both § 220 and the case law upholding a books and records 

inspection for the purpose of investigating mismanagement.”); Khanna v. Covad 

Commc’ns Gp., Inc., 2004 WL 187274, at *6 (Del. Ch. Jan. 23, 2004) (“To engage in 

the [merits-based burden-shifting analysis] would defeat the purposes of this summary 

proceeding and the underlying policy guidance that potential plaintiffs use the procedures 

of Section 220 to determine if a case exists for the shareholder to pursue.’”).

75 See, e.g., Se. Pa. Trans. Auth. v. AbbVie Inc., 2015 WL 1753033, at *13 (Del. Ch. 

Apr. 15, 2015) (“[I]f a stockholder seeks inspection solely to evaluate whether to bring 

derivative litigation, the corporate wrongdoing which he seeks to investigate must 

necessarily be justiciable.”). 
25

its face was not viable as a matter of law.

76

 In either event, it was clear to the court 

that no amount of additional information would aid the stockholder in pleading or 

prosecuting the contemplated plenary action,so the inspection demand was denied.

77

Although our courts have not addressed whether a company may invoke

Corwin as a bar to inspection in a Section 220 proceeding, this court has rejected 

similar attempts to invoke merits-based defenses that turn on doctrinal burden

shifting as a basis to defend otherwise properly supported demands for inspection. 

For instance, in Khanna v. Covad Communications Group, the defendant argued that 

the plaintiff could not demonstrate a credible basis to suspect wrongdoing because 

the challenged transactions “were approved by a majority of directors whose 

 

76 See id. (“Because a Section 102(b)(7) exculpatory provision serves as a bar to 

stockholders recovering for certain director liability in litigation, a stockholder seeking to 

use Section 220 to investigate corporate wrongdoing solely to evaluate whether to bring 

derivative litigation has stated a proper purpose only insofar as the investigation targets 

non-exculpated corporate wrongdoing.”); see also id. (citing Graulich v. Dell Inc., 2011 

WL 1843813, at *5 (Del. Ch. May 16, 2011) (addressing time bar); Norfolk Cty. Ret. Sys. 

v. Jos. A. Bank Clothiers, Inc., 2009 WL 353746, at *6 (Del. Ch. Feb. 12, 2009) (addressing 

issue preclusion)). But see Yahoo!, 132 A.3d at 785–87 (discussing circumstances where 

a Section 102(b)(7) defense will not defeat a books and records demand). I note that West’s 

brief did make a passing reference in a footnote to the fact that West’s charter contains an 

exculpatory provision. West made no real attempt to argue why that provision should bar 

Lavin’s claim for inspection here. In any event, I note that the thrust of Lavin’s argument 

is that there is a credible basis to suspect that directors and officers violated the duty of 

loyalty in connection with the Merger. That claim, if ultimately viable, would not be 

captured within Section 102(b)(7) or West’s exculpatory provision. Yahoo!, 132 A.3d at 

785–87 (explaining that claims against officers and claims for breach of the duty of loyalty 

are “not subject to exculpation”).

77 Id.
26

independence and disinterestedness are not fairly questioned by [the plaintiff].”78 

The court disagreed: 

The shareholder seeking to investigate corporate wrongdoing, if [the 

defendant’s] analytical approach were adopted, would first be required 

to survive the functional equivalent of a merits-based dismissal motion 

in the substantive action. While the analysis to be undertaken in 

considering those motions is, of course, important, the Section 220 

action is not the proper forum for that analysis.79 

Khanna correctly observed that a summary Section 220 proceeding is hardly the 

proper setting to consider the nuanced factual and legal questions that are frequently 

featured when the court is asked to apply Section 144 of the DGCL.80 The legal and 

factual questions presented by a properly-invoked Corwin defense are no less 

challenging.81 

 

78 Khanna, 2004 WL 187274, at *6. 

79 Id. The Supreme Court quoted Khanna approvingly in Seinfeld, 909 A.2d at 123.

80 8 Del. C. § 144(a); Cinerama, Inc. v. Technicolor, Inc., 663 A.2d 1134, 1154 (Del. Ch. 

1994) (Allen, C.) (“[C]ompliance with the terms of Section 144 does not restore to the 

board the presumption of the business judgment rule; it simply shifts the burden to plaintiff 

to prove unfairness.”) (citing Kahn v. Lynch Commc’n Sys., 638 A.2d 1110 (Del 1994)).

81 West advances additional merits-based arguments to support its position that the Merger 

was not the product of a conflict-driven process. Def. West’s Opening Br. 26–29 (citing, 

inter alia, In re Synthes, Inc. S’holder Litig., 50 A.3d 1022, 1031 (Del. Ch. 2012); In re

Cyan, Inc. S’holders Litig., 2017 WL 1956955, at *10 (Del. Ch. May 11, 2017); Larkin, 

2016 WL 4485447, at *16–17). For the reasons discussed above, these merits-based 

arguments are premature and should be saved for whatever plenary action Lavin or other 

stockholders may choose to file. See, e.g., Marmon, 2004 WL 936512, at *6 (“[Allowing 

merits-based defenses] would turn on its head both § 220 and the case law upholding a 

books and records inspection for the purpose of investigating mismanagement.”).
27

In rejecting West’s argument that I should take up its Corwin defense now as 

a basis to deny Lavin’s Section 220 demand, I do not mean to diminish the pleading 

stage business judgment deference that must be afforded fiduciaries whose decisions 

are approved by properly informed disinterested stockholders freely exercising their 

right to vote their shares. Nor do I intend to suggest that the fiduciaries Lavin may 

choose to name in a plenary action will not prevail should they invoke Corwin in a 

motion to dismiss Lavin’s complaint. At this stage, I am simply recognizing that 

Lavin will bear a burden to be precise in his pleading should he challenge the 

stockholder vote approving the Merger. Documents he receives under Section 220 

may enable him to prepare a better complaint. That, in turn, will assist the court in 

making an informed decision as to whether a viable breach of fiduciary duty claim 

exists.82

C. Lavin’s Proper Purposes

Lavin’s primary purpose in seeking the Company’s books and records is to 

investigate whether West’s directors and officers breached their fiduciary duties by 

approving a sale of West to Apollo for an inadequate price. If an investigation 

 

82 I note that Lavin has timed his Section 220 demand appropriately. Had he waited to 

initiate this action until after he brought his plenary action, not only would his complaint 

lack the fruits of his Section 220 yield, he also likely would be deemed to have improperly 

employed Section 220 as a substitute for discovery. See Khanna, 2004 WL 187274, at *9 

(“A Section 220 action is not a substitute for discovery under the rules of civil procedure.”) 

(citing Saito v. McKesson HBOC, Inc., 806 A.2d 113, 117 n.10 (Del. 2002)).
28

reveals wrongdoing, he intends to institute litigation against the directors, officers 

and possibly others, including Apollo. He also seeks books and records related to 

director independence. To prevail, Lavin must have presented “some evidence” of 

mismanagement or wrongdoing.

83

1. The Evidence Reveals a Credible Basis to Infer Wrongdoing

As Lavin established at trial, the evidence provides a credible basis from 

which the Court can infer that TH Lee, Quadrangle and West’s management may 

have caused the Board to steer the Merger process in a way that benefited their own 

interests at the expense of the other shareholders. 

First, Lavin presented a credible basis in the evidence to infer that West’s

directors and officers knew a sale of West’s business segments would provide the 

most value to the shareholders even though the shareholders may not have been able 

to appreciate the distinction.84 Lavin points to the Proxy where the Board discloses 

 

83 Seinfeld, 909 A.2d at 118 (explaining that the credible basis standard is the equivalent of 

“some evidence” of wrongdoing).

84 This court has observed that a board’s failure adequately to consider a break-up and sale 

of parts or divisions may constitute a breach of the duties of care and loyalty under Revlon. 

In re El Paso Corp. S’holder Litig., 41 A.3d 432, 445 (Del. Ch. 2012) (discussing how the 

failure to test the market for possible sale of “business units is, of course, relevant to any 

Revlon inquiry,” and “that [the] failure was compounded by a deal protection package”); 

In re Celera Corp. S’holder Litig., 2012 WL 1020471, at *26 (Del. Ch. Mar. 23, 2012) 

(holding that plaintiffs presented a viable claim that defendants breached fiduciary duties 

under Revlon by “selling the Company as a whole” instead of selling its divisions in 

separate transactions), aff’d in part, rev’d on other grounds, 59 A.3d 418 (Del. 2012); Ryan 

v. Lyondell Chem. Co., 2008 WL 2923427, at *15–16 (Del. Ch. July 29, 2008) (denying 

defendants’ motion for summary judgment, in part, because there was a genuine dispute as 
29

that in July 2016, “the Board, Centerview and Company management observed that 

West’s various segments exhibit differing financial profiles and, as a result, investors 

may have difficulty giving appropriate value to the Company’s individual segments 

or the Company as a whole.”85 While stockholders might not have appreciated the 

value of selling off the business segments separately, the evidence suggests that, 

prior to the Merger, the Board may have been thinking along these lines after 

reviewing and then presenting “Sum of the Parts Valuation Metrics” as part of its

presentation at the “Analyst Day” meeting in 2016.

86

 Potential buyers likewise 

appreciated that a sale of West’s business segments may have been more valuable 

 

to whether they breached their fiduciary duties by disregarding “the possibility of breaking 

[the company] up into more valuable parts, particularly given [its] unique market niche and 

[the CEO’s] assessment that few companies would be interested in acquiring [the 

company] in toto.”), rev’d, 970 A.2d 235, 243 (Del. 2009) (holding that plaintiffs failure 

to show that defendants acted in bad faith was dispositive, but the Court of Chancery’s 

decision would have been upheld if the issue “were whether the directors had exercised 

due care”).

85 JX 5 (Proxy) at 30. 

86 JX 16 (Form 8-K) at 49; see also JX 5 (Proxy) at 29 (“[In the beginning of 2016] [t]he 

Board instructed Company management to begin an evaluation of each of the Company’s 

segments, both individually and as a whole, including the creation of five-year financial 

projections for the Company and its segments. . . . Beginning in the spring of 2016 and 

continuing into the fourth quarter of 2016, Company management continued its business 

and financial analysis of each of the Company’s segments, including a review of the 

competitive landscape, market trends, growth opportunities, profitability, margins, 

products and services of each segment.”).
30

than a whole-company sale,

87 as revealed in the fact that at least two bidders (Party H 

and Party L) made sizable offers for certain of West’s segments.88 This is “some 

evidence” from which the Court can infer that the Board and its high-level officers 

may have believed that a sale of separate business segments would have yielded 

more value to West’s shareholders than a sale of the whole company.

89

Second, Lavin presented some evidence from which the Court can infer that

TH Lee and Quadrangle pushed the Board towards a sale of the Company in 

furtherance of their own interests to the detriment of West’s stockholders. At the 

time of the Merger, TH Lee and Quadrangle had been West stockholders since 2006, 

meaning their investments were likely approaching their horizons.

90

 There is no 

 

87 JX 5 (Proxy) at 32–35 (showing several third parties expressing interest in all of West’s 

segments).

88 JX 5 (Proxy) at 35.

89 As noted, the Merger Agreement’s no-shop provision also may have prevented a more 

valuable sale of segments from occurring. See JX 5 (Proxy) at 8, 85–87.

90 See Usha Rodrigues & Mike Stegemoller, Exit, Voice, and Reputation: the Evolution of 

SPACS, 37 Del. J. Corp. L. 849, 853 (2013) (“To prevent the manager from merely sitting 

on the money, the [private equity] fund faces a limited investment horizon; after ten years, 

investors get their money back.”); Mark J. Roe, Corporate Short-Termism—In the 

Boardroom and in the Courtroom, 68 Bus. Law. 977, 987–88 (2013) (noting that private 

equity funds “often [have] time horizons of years, sometimes stretching toward a decade”); 

Brian Cheffins & John Armour, The Eclipse of Private Equity, 33 Del. J. Corp. L 1, 11 

(2008) (“Most private equity funds are established for a fixed term, typically ten years, 

consisting of an investment period when the general partners make capital calls and a 

holding period where existing investments are managed, developed, and ultimately sold. 

Unless an extension is secured, when the term has expired, the fund must sell its 

investments and return the capital to fund investors.”).
31

question that the private equity funds’ managers served on the Board (Huber, DiNovi 

and Grattan). And there is no question that the funds had a contractual right to seat

two additional directors which, if exercised, would result in their control of half the 

Board. TH Lee and Quadrangle may also have had a degree of control over Sloma 

and Garcia, as these two directors were appointed to the Board while the funds 

controlled the Company and maintained a contractual right to control the Board 

composition.

91

 The funds had been in liquidation mode leading up to the time West 

started receiving expressions of interest,

92 and they agreed to leave money on the 

table in the Merger—$3–$5 million for an employee retention plan—in order to get 

the deal across the finish line.93 Thus, there is some evidence that TH Lee and 

 

91 JX 8 (Annual Meeting Proxy) at 5; JX 9 (West’s Prospectus) at 80. I reject West’s 

contention that Lavin waived his argument regarding TH Lee’s and Quadrangle’s alleged 

control over half the Board. The doctrine of waiver operates to ensure fairness by requiring 

that notice be given to the adverse party. See PharmAthene v. SIGA Tech., Inc., 2011 

WL 6392906, at *2 (Del. Ch. Dec. 16, 2011) (“The general rule . . . that a party waives any 

argument it fails properly to raise shows deference to fundamental fairness and the common 

sense notion that, to defend a claim or oppose a defense, the adverse party deserves 

sufficient notice of the claim or defense in the first instance.”). Lavin presented this issue 

squarely in his opening brief. This provided West plenty of notice of the claim and more 

than a fair opportunity to address it at trial. See Pl. Lavin’s Opening Br. 4–5, 14–15, 25. 

It is also clear from Lavin’s initial demand for inspection that he was concerned about

TH Lee’s and Quadrangle’s ability to pressure the Board. JX 3 (Lavin’s Demand to Inspect 

Books and Records) at 4.

92 E.g., JX 10 (West March 2015 Secondary Offering Prospectus Supplement).

93 JX 5 (Proxy) at 39 (“DiNovi noted that THL and Quadrangle would be willing to provide 

between $3 million and $5 million (in the aggregate) of their proceeds from the transaction 

to fund an additional retention plan for the Company’s senior management, payable at the 

closing of the transaction.”).
32

Quadrangle desired and obtained a prompt liquidation of their aging investments for 

a price that may have been unfair to the other stockholders.94

Third, Lavin presented some evidence from which the Court can infer that the 

directors and high-level officers had financial incentives to approve a sale of the 

Company even if a sale of its segments offered more value. Barker, the Chairman 

and CEO, was set to receive a golden parachute payment of approximately 

$19 million plus millions more in equity awards in the event the Company was sold 

as a whole. And each of the non-employee directors was set to receive 

approximately $200,000 for a sale of the Company as a whole, which they otherwise 

might not have received if the Company continued on a standalone basis or sold its 

segments.95 From this evidence, there is a credible basis to infer that the directors 

 

94 West argues that TH Lee and Quadrangle could have engaged in another secondary 

offering or distributed their holdings in kind to their limited partners if they needed to wrap 

up their investment in West. Although that may be true, Lavin has presented some 

evidence that these courses of action may not have been preferable when compared to a 

prompt whole-company sale that resulted in both immediate liquidity and a premium to the 

trading price. The other options that West presents could have resulted in less value to the 

funds and their limited partners. See JX 5 (Proxy) at 45 (“[I]f the Company did not enter 

into the merger agreement, [TH Lee and Quadrangle] could elect to distribute their shares 

of West common stock to their limited partners, which could have a negative impact on the 

Company’s stock price.”); JX 12 (Yahoo! Finance Chart) (showing drops in West’s stock 

price following secondary offerings).

95 West argues that the awards to the independent directors is not evidence of anything 

because they would have received equity grants regardless of whether vel non the Merger 

occurred (Tr. at 58:23–59:6). But the Merger resulted in the vesting of restricted stock 

units plus a cash award. JX (Proxy) 5 at 58. It is reasonable to infer that the non-employee 

directors’ stock units would have remained restricted if the Merger did not close, because 
33

faced two options—a sale of the Company as a whole or a more valuable sale of its 

segments—and they pursued the less valuable option that provided benefits to them 

that were not enjoyed by the other shareholders. 

With the low Section 220 evidentiary threshold very much in mind, I am 

satisfied that Lavin has presented “legitimate issues of wrongdoing.”

96

 Stated 

differently, Lavin has presented “some evidence” that West’s directors and officers 

may have breached their Revlon duties, possibly in bad faith.97 Accordingly, he has 

stated a proper purpose to inspect certain documents related to the Merger process.98

 

otherwise there would have been no point to allowing those units to vest “as a result of the 

merger.” JX 5 (Proxy) at 57–58.

96 Sec. First Corp., 687 A.2d at 568 (“[T]he threshold may be satisfied by a credible 

showing, through documents, logic, testimony or otherwise, that there are legitimate issues 

of wrongdoing.”).

97 See In re El Paso, 41 A.3d at 445 (noting that failure to “do a soft check of the market 

[for the target company’s] attractive business units is, of course, relevant to any Revlon 

inquiry, but particularly when questions of loyalty exist,” and that the failure was 

“important because it was clear that the most valuable alternative to the Merger . . . was 

likely a sale of El Paso’s two main businesses to separate buyers (the kind of break-up that 

was de rigeur in the 1980s), or a sale of one business while retaining the other as a

standalone public company (a twist on the spin-off)”); In re Netsmart Tech., Inc. S’holder 

Litig., 924 A.2d 171, 198–99 (Del. Ch. 2007) (finding that plaintiffs demonstrated 

reasonable probability of success in a Revlon claim observing that the board “rapidly 

narrowed its options to a channel consistent with [the directors’ personal] incentives” by 

pursuing a deal with private equity bidders over a strategic buyer).

98 West offers Marathon P’rs, L.P. v. M&F Worldwide Corp. as comparable to this case

and argues that Lavin has presented only “speculation of mismanagement.” 

2004 WL 1728604, at *7 (Del. Ch. July 30, 2004). Marathon is distinguishable on its facts, 

as the plaintiff in that case suspected the directors breached their Revlon duties when they 

rebuffed a single overture outside of any bidding process. Id. Unlike Marathon, this case 

involves a company that was actually “in play” and Lavin has presented some evidence 
34

2. Director Independence

In the midst of proving his credible basis to suspect wrongdoing in connection 

with the Merger process, Lavin also demonstrated that he has a proper purpose to 

investigate director independence. It is well established that the desire to investigate 

director independence is a proper purpose.99 Such an inspection is especially proper 

in this case because Lavin has shown that there is a credible basis to question whether 

TH Lee and Quadrangle, as a practical matter, controlled half of the Board.100

D. Scope of Production

Lavin seeks to inspect thirteen categories of books and records that he claims 

“address the crux” of his stated purposes.

101

 Some of these materials are warranted; 

others are not. Specifically, I am satisfied that the following categories of documents 

 

that those at the levers of control may have steered the sale process in a direction that 

benefited them personally. 

99 As observed in Amalgamated Bank v. Yahoo!, our courts routinely conclude that a 

stockholder states a proper purpose when he seeks to investigate director independence and 

disinterestedness. 132 A.3d at 784–85 (“[T]he Delaware Supreme Court has indicated that 

a plaintiff could obtain ‘a file of the disclosure questionnaires for the board’ or similar 

materials that could ‘provide more detail about the thickness of the relationship[s]’ in the 

boardroom.”) (citing Del. Cty. Empls.’ Ret. Fund v. Sanchez, 124 A.3d 1017, 1024 

(Del. 2015)).

100 See, e.g., JX 7 (S’holder Agreement) at 2 (showing that TH Lee and Quadrangle have a 

contractual right to appoint five of West’s ten directors).

101 Pl. Lavin’s Opening Br. 27 (quoting Wal-Mart Stores, Inc. v. Ind. Elec. Works Pension 

Tr. Fund IBEW, 95 A.3d 1264, 1271 (Del. 2014)). 
35

are “necessary and essential”

102 to pursue Lavin’s proper purposes, as determined 

above:

(1) Sum-of-the-parts metrics, analyses and presentations that were

provided to the Board by Centerview or West’s officers from January 1, 

2016 to July 26, 2017; (2) indications of interest, offers, terms sheets 

and draft agreements that West received from or exchanged with

bidders from January 1, 2016 to July 26, 2017, whether related to a 

potential sale of the Company as a whole or a sale of its segments;

(3) Board minutes related to indications of interest and offers to 

purchase the Company’s segments from January 1, 2016 to July 26, 

2017; (4) books and records reflecting communications related to a 

potential sale of one or more of West’s segments between Barker, Jan 

Madsen, David Treinen, DiNovi or Huber, on the one hand, and any 

officer, director, employee or agent of Centerview or any potential 

acquirer of any part of the Company, on the other hand, from January 1, 

2016 to July 26, 2017, including (but not limited to) emails, memoranda 

and notes;103 and (5) materials provided to the Board or any of its 

committees from January 1, 2016 to July 26, 2017 concerning the 

independence or disinterestedness of any director, including any 

disclosure questionnaires.

Because many of Lavin’s document demands landed with the precision of 

buckshot,104 I have awarded inspection of only those documents that are necessary 

 

102 Wal-Mart Stores, 95 A.3d at 1278 (discussing the “necessary and essential” standard).

103 See Yahoo!, 132 A.3d at 791–94 (ordering the production of targeted electronic 

documents and emails because they were “corporate records” that would “show what [key 

players] knew and when”).

104 Id. at 776 (“The production order ‘must be carefully tailored.’ Framed metaphorically, 

it should be ‘circumscribed with rifled precision’ to target the plaintiff’s proper purpose.”) 

(quoting Sec. First, 687 A.2d at 565, 570). For instance, Lavin seeks “all books and records 

provided to or referred by the individuals who drafted the [Proxy],” “all documents 

produced to any other stockholder or their counsel in response to a demand” under 

Section 220 and “all books and records reflecting communications between [six officers 

and directors] and any officer, director, employee or agent of Centerview, LionTree 
36

to enable him to pursue the proper purposes articulated in his inspection demand. 

To reiterate, the credible basis to suspect wrongdoing here raises the question of 

whether the Board, for self-interested reasons, favored a less valuable sale of the 

Company over a more valuable sale of its segments. The relevant time period 

implicated by this question is January 2016 through July 2017—the period 

beginning when third-parties first expressed interest and the Board began 

contemplating strategic transactions, and ending with the stockholder vote

approving the Merger.

105

 The documents in the permitted categories will allow 

Lavin to investigate whether the Board knew a sale of segments separately would be 

more valuable to stockholders than the Merger, and whether the Board pursued the 

Merger nevertheless for the benefit of its members, senior management, and private 

equity investors and to the detriment of the other stockholders. When measured 

against the Proxy, the documents may also offer some insight into whether the 

stockholder vote was fully informed as Lavin attempts to meet his pleading burden 

in anticipation of a Corwin defense. 

 

Advisors, LLC . . . Apollo, or any other potential acquiror of the Company or any part 

thereof.” Lavin’s Opening Br. 28–39 (citing JX 3 (Lavin’s Demand to Inspect Books and 

Records)) (emphasis supplied). 

105 See JX 5 (Proxy) at 29; JX 13 (West’s Form 8-K filed July 27, 2017) at 2.
37

III. CONCLUSION

For the foregoing reasons, a judgment shall be entered in favor of Lavin that 

directs the Company to allow inspection of the books and records designated in this 

Opinion. Lavin shall submit a proposed implementing order and final judgment on 

notice to West within ten (10) days.

IT IS SO ORDERED.