Opinion ID: 2198532
Heading Depth: 2
Heading Rank: 3

Heading: HBOC Documents

Text: Finally, the Court of Chancery held that Saito was not entitled to any HBOC documents because he was not a stockholder of HBOC before or after the merger. Although Saito is a stockholder of HBOC's parent, McKesson HBOC, stockholders of a parent corporation are not entitled to inspect a subsidiary's books and records, [a]bsent a showing of a fraud or that a subsidiary is in fact the mere alter ego of the parent.... [11] The Court of Chancery found no basis to disregard HBOC's separate existence and, therefore, denied access to its records. We reaffirm this settled principle, which applies to those HBOC books and records that were never provided to McKesson or McKesson HBOC. But it does not apply to relevant documents that HBOC gave to McKesson before the merger, or to McKesson HBOC after the merger. We assume that HBOC provided financial and accounting information to its proposed merger partner and, later, to its parent company. As with the third party advisors' documents, Saito would need access to relevant HBOC documents in order to understand what his company's directors knew and why they failed to recognize HBOC's accounting irregularities.