IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
THOMAS KEESLING, )
)
Plaintiff, )
)
v.
) C.A. No. 2026-0140-LM
WORLD CLASS HEALTH, )
INC., a Delaware Corporation, )
)
Defendant. )
Date Submitted: June 10, 2026
Final Report: August 14, 2026
POST-TRIAL FINAL REPORT
Thomas Keesling, Parma, OH; Plaintiff.
Joseph B. Cicero, Dakota B. Eckenrode, CHAPMAN BROWN CICERO & COLE,
LLP, Wilmington, DE; Counsel for Defendant.
MITCHELL, M.
1
I. INTRODUCTION
This action arises under 8 Del. C. § 220. Plaintiff Thomas Keesling, a former
consultant and current stockholder of Defendant World Class Health, Inc.,
demanded inspection of books and records to value his equity and to investigate
potential mismanagement, wrongdoing, and breaches of fiduciary duty. The
Company declined the demands, asserting that a provision in Keesling’s Stock
Option Agreement waived statutory inspection rights, that Keesling lacked a proper
purpose, and that the demands exceeded the scope of Section 220. As such, this
action required the Court to determine whether the Option Agreement effected a
waiver of Plaintiff’s statutory inspection rights, whether the demand satisfied § 220’s
procedural requirements, whether Plaintiff established a proper purpose, and, if so,
the necessary and essential scope of inspection under the statute.
As further explained herein, the Court finds that the Option Agreement’s
waiver did not bar Plaintiff’s statutory inspection rights. Only Plaintiff’s November
26, 2025, demand, however, satisfied Section 220’s procedural requirements.
Plaintiff established proper purposes to value his shares and investigate potential
corporate mismanagement, but his inspection is limited to records that are necessary
and essential to accomplish those purposes, not the broader categories of documents
he requested. Accordingly, Plaintiff’s demand is GRANTED in part and DENIED
in part. This is my Final Report.
2
II. FACTUAL BACKGROUND 1
A. The Parties
Defendant WCH (“WCH” or the “Company”) is a Delaware corporation
operating in the healthcare industry whose sole director is Siddharth “Sid” Nambiar.2
At all relevant times, Siddharth Nambiar served as WCH’s Chief Executive Officer,
and acted on the Company’s behalf in its dealings with Thomas Keesling (the
“Plaintiff” or “Keesling”). 3 Keesling, a longtime healthcare executive, co-founded
IndusHealth, Inc. (“IndusHealth”), with Rajesh Rao.4 Through his work with
IndusHealth, Keesling developed a business relationship with WCH, which
ultimately evolved into an ongoing consulting arrangement and, later, Keesling’s
ownership interest in WCH. 5
1
The facts in this Report reflect my findings based on the record developed at the halfday trial held on June 10, 2026. I grant the evidence the weight and credibility I find it deserves. Citations to the Docket are cited in the form of “D.I. __.” Citations to the transcript are in the form of “Tr. __.” The parties submitted joint exhibits numbered 1–32. Citations to the joint exhibits are in the form of “JX__.”
2
D.I. 1 at 7; D.I. 34 at 10; D.I. 36 at 2.
3
D.I. 1 at 4; D.I. 34 at 14.
4
D.I. 1 at 12.
5
D.I. 1 at 10; D.I. 34 at 33; D.I. 36 at 5.
3
B. IndusHealth Transaction
On May 14, 2024, WCH and IndusHealth executed a term sheet (“Term
Sheet”) contemplating WCH’s acquisition of IndusHealth.6 The Term Sheet
contemplated that the parties would negotiate and execute definitive transaction
documents, and expressly provided that, except for certain enumerated provisions,
binding obligations would arise only upon the execution of those definitive
agreements. 7
Consistent with the Term Sheet, WCH executed documents that were required
to complete the transaction, including an Employment Agreement (“Employment
Agreement”), and Independent Contractor Agreement (“Independent Contractor
Agreement”) between the Company and Keesling on May 14, 2024.8 Under the
Independent Contractor Agreement, Keesling agreed to provide consulting services
to WCH, and would have been eligible to receive options to purchase WCH common
stock, subject to approval by WCH’s Board of Directors.9
6
D.I. 36 at 2.
7
See JX-1 at 3 (“Legally binding obligations between the parties will be created only through execution and delivery of definitive documents.”).
8
D.I. 36 at 3–4.
9
Id. at 3.
4
C. Execution of the Equity Plan Option Agreement & Waiver
On April 16, 2025, nearly one year after the parties executed the Term Sheet,
WCH delivered to Keesling the Equity Incentive Plan Option Agreement (“Option
Agreement” or “Agreement”) under the Company’s 2024 Equity Incentive Plan.10
The Agreement granted Keesling the option to purchase vested shares of WCH
shares and included Section 15 titled “Waiver of Statutory Information Rights.”11
The parties dispute the legal effect of that provision, which lies at the center of this
Action.
On April 17, 2025, one day after receiving and executing the Option
Agreement, Keesling submitted a request to exercise 5,000 vested stock options.12
WCH did not immediately approve the exercise because it was evaluating its
potential legal remedies related to Plaintiff’s failure to comply with his obligations
under the Term Sheet. 13 Eventually, on September 30, 2025, WCH’s Board
authorized Keesling’s exercise request and approved the issuance of 5,000 shares of
WCH common stock.14 From that point forward, Keesling became a stockholder of
WCH.
10
Id. at 4.
11
Id. at 4–5, 15.
12
D.I. 34 at 14; D.I. 36 at 5.
13
D.I. 36 at 5.
14
Id.
5
D. Plaintiff’s Section 220 Demands
The parties’ relationship deteriorated during 2025 as disagreements emerged
concerning the status of the IndusHealth transaction and WCH’s alleged use of
IndusHealth’s business information. Keesling believed WCH had used
IndusHealth’s operating history and performance metrics in connection with its
November 2024 and April 2025 financing rounds, which together raised
approximately $18 million, despite never completing the acquisition contemplated
by the May 2024 Term Sheet.15 According to Keesling, WCH never produced the
definitive transaction documents referenced in the Term Sheet.16 Those concerns
prompted Keesling to seek inspection of WCH’s books and records.
On March 21, 2025, Keesling served his first demand seeking to inspect
WCH’s books and records.17 He followed with a second written demand on April
4, 2025, again requesting inspection after receiving no substantive response to his
initial demand. 18 On October 20, 2025, Keesling served a third inspection demand
requesting, among other things, that WCH cease using IndusHealth’s proprietary
15
D.I. 34 at 12, 19.
16
Id. at 20.
17
JX-4; D.I. 36 at 4.
18
JX-6; D.I. 34 at 16; D.I. 36 at 4.
6
information and correct what he characterized as misrepresentations concerning the
parties’ Term Sheet. 19
WCH responded to the demands by disputing both the sufficiency of
Keesling’s inspection demand and the merits of the allegations contained in his
October 20, 2025 letter, characterizing those allegations as “unfounded” and “legally
insufficient.” 20 The Company advised that, if Keesling initiated litigation on those
grounds, it would “vigorously defend itself” and anticipated litigation costs
exceeding more than $300,000.21 At the same time, WCH offered to purchase
Keesling’s entire equity interest for $200,000, subject to a mutual release of claims,
stating that the offer would remain open until November 5, 2025. 22 On November
10, 2025, WCH terminated Keesling’s consulting Independent Contractor
Agreement. 23 Keesling contends that the termination did not comply with Section
10.2 of the Independent Contractor Agreement. 24
On November 26, 2025, Keesling served his fourth and final demand
(“November Demand”). 25 The demand sought inspection of numerous categories of
19
See JX-11.
20
See JX-12.
21
Id.
22
Id.
23
See JX-13.
24
D.I. 34 at 17
25
See JX-14.
7
books and records, including board and committee minutes, stock ledgers,
capitalization tables, documents concerning his equity interest and termination,
materials relating to WCH’s November 2024 and April 2025 financing rounds,
communications related to the CEO’s personal share-purchase request, and other
records relating to the Company’s relationship with IndusHealth.26 For purposes of
the analysis that follows, it is important to distinguish the purposes articulated in the
November Demand from the manner in which those purposes were later
characterized in the Complaint. The Demand expressly identified two purposes: (1)
valuation of Plaintiff’s equity interest and (2) investigation of potential
mismanagement, wrongdoing, and breaches of fiduciary duty. 27 Although the
Demand separately sought records concerning IndusHealth and the Term Sheet, it
did not articulate an independent proper purpose directed to those matters. The
Complaint, by contrast, characterizes Plaintiff’s purposes as three-fold, adding
assessment of the Company’s exposure to claims arising from discrepancies between
the IndusHealth Term Sheet and investor representations as a distinct third purpose,
and the parties’ briefing largely follows that three-part framing.28
26
Id.
27
D.I. 1 at 3; JX-14;
28
See D.I. 1 at 3; D.I. 34 at 19–21; D.I. 36 at 23.
8
Because it is the Demand, not the Complaint or the parties’ subsequent
characterization of it, that must satisfy Section 220’s requirements, the Court’s
analysis below takes the Demand’s two stated purposes as the operative frame of
reference.
E. Procedural Posture
Plaintiff commenced this action on February 2, 2026 seeking to inspect
WCH’s books and records under 8 Del. C. § 220.29 WCH answered, denying
Plaintiff’s entitlement to inspection asserting, among other things, that Plaintiff
contractually waived his statutory inspection rights, failed to establish a proper
purpose, and sought records beyond the scope permitted by Section 220.30 The
Court conducted a half-day paper-record trial on June 10, 2026.31 At the conclusion
of trial, this matter was taken under advisement.
III. ANALYSIS
Plaintiff contends that he is entitled to inspect WCH’s books and records to
value his equity interest, investigate potential corporate mismanagement arising
from WCH’s relationship with IndusHealth and subsequent financing rounds, and
assess the Company’s governance. 32 WCH responds that Plaintiff contractually
29
See D.I. 1.
30
See D.I. 19.
31
See D.I. 58.
32
D.I. 1; D.I. 34.
9
waived his statutory inspection rights, failed to establish a proper purpose, and, in
any event, seeks books and records beyond those permitted by Section 220. 33
For the reasons that follow, I conclude that Plaintiff did not waive his statutory
inspection rights, and only the November Demand satisfied Section 220’s procedural
requirements. Inspection is limited to those records that are necessary and essential
to accomplish those purposes under the amended statute subject to the limitations
discussed below.
A. Legal Standard
Under 8 Del. C. § 220(b), a stockholder seeking inspection must first serve a
verified written demand.34 When the request extends beyond the stock ledger or list
of stockholders, the stockholder must establish that the demand was made in good
faith for a proper purpose.35 Plaintiff must also describe both the purpose and the
requested records with reasonable particularity, and demonstrate that the requested
records are specifically related to that purpose.36 If the corporation refuses the
demand or fails to respond within the statutory period, the stockholder may
commence an action under Section 220(c). If the stockholder proves compliance
with Section 220(b), the Court may order production of the categories of books and
33
D.I. 19; D.I. 36.
34
8 Del. C. § 220(b).
35
Id. § 220(b)(2)(a).
36
Id. § 220(b)(2)(b)–(c).
10
records identified in the statute.37 Where certain formal corporate records do not
exist, the court may instead order production of their functional equivalent, but only
to the extent necessary and essential to accomplish the stockholder’s proper
purpose. 38 Requests beyond the enumerated categories expressly identified in
Section 220 face a heightened standard. The Court, therefore, must determine not
only whether inspection is warranted, but also whether the particular categories of
documents sought satisfy the limitations imposed by the amended statute.
B. Principles Governing Waiver of Statutory Inspection Rights
Waiver requires an intentional, knowing, and voluntary relinquishment of a
known right. 39 Because waiver relinquishes an existing legal right, Delaware courts
require any waiver, and particularly a waiver of statutory rights, be unequivocal and
“clearly and affirmatively expressed in the relevant document.” 40 These are two
distinct requirements. The first portion requires clarity, asking whether the operative
language, read on its face, unambiguously relinquishes the right at issue. The second
portion requires knowledge and voluntariness, asking whether the party who
executed the document actually possessed knowledge of all material facts and the
37
Id. § 220(c).
38
Id. § 220(f).
39
Manti Hldngs., LLC v. Authentix Acquisition Co., Inc., 261 A.3d 1199, 1210 (Del. 2021) (quoting Minna v. Energy Coal S.p.A., 984 A.2d 1210, 1214 (Del. 2009)); Kortum v. Webasto Sunroofs, Inc., 769 A.2d 113, 125 (Del. Ch. 2000).
40
Kortum, 769 A.2d at 125.
11
rights and circumstances surrounding its relinquishment.41 Delaware law recognizes
an important distinction between restrictions on statutory stockholder rights imposed
through charter or bylaw provisions and those contained in stockholder-level
agreements. The distinction reflects, at least in part, the different forms of consent
implicated by each: charter and bylaw provisions may operate through an impliedconsent regime, whereas stockholder-level agreements generally rest on the
stockholder’s actual contractual consent.42 However, whether a private bargained
for stockholder-level agreement may accomplish this is a different question, that
courts have deemed may be enforceable if the waiver is sufficiently clear. 43
In Manti Holdings, the Delaware Supreme Court enforced a waiver of
appraisal rights under 8 Del. C. § 262, but took care to limit its holding to the record
before it, where the stockholders were “sophisticated and informed stockholders,
who were represented by counsel and had bargaining power,” and who received
41
Bantum v. New Castle County Vo-Tech Educ. Ass’n, 21 A.3d 44, 50 (Del. 2011) (“Waiver is the voluntary and intentional relinquishment of a known right. It implies knowledge of all material facts and an intent to waive, together with a willingness to refrain from enforcing those [ ] rights.”).
42
See Peneff Hldngs., LLC. v. Nurture Life, Inc., 2024 WL 3964006, at *5 n.40 (Del. Ch. Aug. 28, 2024); Abry P’rs V, L.P. v. F&W Acquisition LLC, 891 A.2d 1032, 1059–1063 (Del. Ch. 2006).
43
See New Enter. Assocs. 14, L.P. v. Rich, 295 A.3d 520, 540 (Del. Ch. 2023); Peneff Hldngs., 2024 WL 3964006, at *5.
12
valuable consideration in exchange for the waiver. 44 The Court repeated that
premise throughout its opinion. 45
Two principles follow. First, a stockholder may waive a statutory right,
including a right of inspection under Section 220, through private agreement, so long
as the waiver is clear and affirmatively expressed.46 However, the clarity of the text
does not end the inquiry. The Court must also determine whether the surrounding
circumstances, including, but not limited to, whether the waiving party was
represented by counsel, had bargaining power, and possessed the sophistication to
appreciate what was being relinquished, to establish that the waiver was knowing
and voluntary.47
C. The Parties Advance Competing Interpretations of Section 15 and
Its Enforceability
Plaintiff challenges Section 15’s waiver enforceability on several grounds.48
He argues that a later-delivered boilerplate waiver cannot retroactively extinguish
inspection rights that had already been asserted; that the waiver was not clearly and
44
Manti Hldngs., 261 A.3d at 1204 (“Accordingly, we hold that Section 262 does not prohibit sophisticated and informed stockholders, who were represented by counsel and had bargaining power, from voluntarily agreeing to waive their appraisal rights in exchange for valuable consideration.”).
45
See id. at 1220, 1225.
46
Kortum, 769 A.2d at 125; Peneff Hldngs., 2024 WL 3964006, at *5.
47
Manti Hldngs., 261 A.3d at 1204, 1221–22.
48
See D.I. 43 at 8–13.
13
affirmatively expressed in context; and that any purported waiver was neither
knowing nor voluntary because it appeared in a standard-form Option Agreement,
and was presented without negotiation.49 Plaintiff further argues that his March 21,
2025, and April 4, 2025, demands predated the delivery of the Option Agreement
and that Section 15 does not expressly apply to demands already pending or
previously asserted.50
WCH responds that Delaware’s strong policy favoring freedom of contract
permits a private waiver of statutory inspection rights where the waiver is clearly
and affirmatively expressed.51 It contends that Section 15 satisfies that standard
because it appears in a separate provision entitled “Waiver of Statutory Information
Rights” within the ten-page Option Agreement and unambiguously states that
Plaintiff waived his statutory inspection rights. 52 WCH further asserts that Plaintiff
reviewed the Option Agreement before exercising his options and accepted the
benefits it conferred, and therefore should be bound by its terms. 53 WCH contends
49
Id. at 8–13, 39–40.
50
Id. at 9.
51
D.I. 36 at 13–15.
52
Id.
53
Id. at 14–16.
14
that the clarity of the contractual language, coupled with Delaware’s strong policy
favoring freedom of contract, compels enforcement of Section 15. 54
D. Section 15 Does Not Bar Plaintiff’s November 26, 2025, Verified
Demand
The Section 15 waiver is not enforceable to bar the November 26, 2025,
demand. Its language clearly and affirmatively waives Plaintiff’s statutory
inspection rights on its face, satisfying the first requirement described above. But
the record does not establish that Plaintiff knowingly and voluntarily relinquished
those rights, so the waiver fails on the second, independent requirement.
The record reflects that Plaintiff proceeded without counsel throughout the
negotiation and execution of the Option Agreement. 55 Plaintiff is an educated and
accomplished professional in the healthcare industry; however that professional
accomplishment is not the same as investment sophistication. 56 The Court finds that
distinction significant. The record does not reflect that Plaintiff had experience
negotiating equity incentive plans, venture financing documents, or contractual
waivers of statutory stockholder rights, the kind of experience that distinguished the
54
Id. at 14.
55
Tr. 84:3–85:7.
56
See D.I. 34 at 10; The Court uses the term “sophisticated investor” in its legal sense, referring to a person’s financial knowledge and experience in evaluating investments, rather than as a reflection of the person’s general intelligence, professional accomplishments, or expertise in another field.
15
Manti Holdings stockholders. Unlike the negotiated stockholders’ agreement at
issue in Manti Holdings, Section 15 appears as one provision within the Agreement
issued to Plaintiff as part of his compensation. Nothing in the record suggests that
Section 15 was separately negotiated or that the parties discussed the consequences
of waiving Section 220 rights.57
The trial record confirms Plaintiff’s own uncertainty about the very interest
he purportedly waived his right to investigate. Plaintiff testified that he believed he
had acquired an ownership interest in the Company based on the parties’ May 14,
2024 Term Sheet and the parties’ subsequent dealings.58 He further testified that he
believed he had been excluded from multiple financing rounds and “kept in the dark”
regarding his own equity position and share account.59 The record also reflects that
Plaintiff sought confirmation of his equity status and attempted to participate in a
financing round before the Company recognized him as a stockholder.60 These
events demonstrate that Plaintiff himself remained uncertain regarding the existence,
timing, and scope of his alleged ownership interest. Although the basis for those
beliefs was not made clear, they show Plaintiff did not have a settled understanding
of his own equity position when he executed the Option Agreement. A stockholder
57
D.I. 34 at 10; Tr. 84:3–85:7.
58
Tr. 11:4–13:16; 26:5–28:21; D.I. 34 at 14; D.I. 36 at 5.
59
Tr. 15:17–21.
60
See generally JX-3.
16
who is uncertain what he owns is poorly positioned to knowingly relinquish the right
to inspection, the very right that exists, in part, to resolve that uncertainty.
This conclusion is consistent with the recent decision in Bernstein.61 There,
the Court enforced a general release barring a direct Section 220 action where the
release was contained in a redemption agreement that the stockholder negotiated
through counsel.62 Bernstein did not apply Manti Holdings’ knowing and voluntary
framework and did not turn on stockholder inspection sophistication; it resolved the
scope of a general release under ordinary contract interpretation principles. But the
contrast is instructive. The stockholder in Bernstein negotiated, through counsel, the
very transaction that contained the release he later sought to avoid. The Plaintiff
here, by contrast, executed a standard form agreement, unrepresented, with no
negotiation over Section 15 and no discussion of the rights it purported to extinguish.
Although Delaware law permits private parties to waive statutory rights,
including rights of inspection, under appropriate circumstances, the surrounding
facts here do not establish the knowing and voluntary relinquishment needed to
enforce the waiver.63 On this record, Plaintiff was unrepresented, did not negotiate
Section 15, and was himself uncertain about his equity interest.
61
Bernstein v. MyJoVE Corp., 2026 WL 1907263 (Del. Ch. July 2, 2026).
62
Bernstein, 2026 WL 1907263, at *3–4.
Juul Labs, Inc. v. Grove, 238 A.3d 904, 919–20 (Del. Ch. 2020); Peneff Hldngs., 2024 63
WL 3964006, at *5.
17
The Court concludes that Plaintiff is not a party for whom Section 15 waiver
is enforceable. Section 15 therefore does not bar Plaintiff’s November Demand.
E. Only Plaintiff’s November 26, 2025, Demand Satisfied Section
220’s Procedural Requirements
Defendant argues that Plaintiff’s March 21, 2025, and April 4, 2025, demands
failed to satisfy Section 220 because Plaintiff had not yet become a WCH
stockholder and neither demand complied with the statute’s form-and-manner
requirements. 64 WCH further asserts that Plaintiff’s October 20, 2025, demand
likewise failed to comply with Section 220 because it was not made under oath as
required by Section 220(b).65 The Court agrees.
Section 220 requires strict compliance with its procedural requirements. A
stockholder seeking inspection must establish both that he held stock at the time the
demand was made and that the demand complied with the statute’s prescribed form
and manner requirements.66 Plaintiff executed the Option Agreement from WCH
on April 16, 2025. 67 Plaintiff exercised the options granted under that Agreement
on April 17, 2025.68 WCH’s Board did not approve Plaintiff’s exercise request and
64
D.I. 36 at 4; JX-11.
65
D.I. 36 at 4.
66
8 Del. C. § 220(c)(2).
67
D.I. 36 at 4.
68
Id. at 5.
18
issue the corresponding shares until September 30, 2025, at which time Plaintiff
became a WCH stockholder.69 Accordingly, Plaintiff did not satisfy the stockholderstatus requirement when he served his March 21, 2025, and April 4, 2025, demands.
Because Plaintiff was not yet a stockholder, he could not invoke the inspection rights
afforded by Section 220, and those demands therefore failed to satisfy the statute’s
procedural requirements.
Plaintiff’s October 20, 2025, demand suffered from a different procedural
defect. Although Plaintiff had become a stockholder by that time, the October 20
demand was not made under oath. 70 Section 220 expressly requires that a demand
be made under oath, and Delaware courts require strict adherence to that statutory
requirement.71 Accordingly, Plaintiff’s October 20, 2025, demand likewise failed to
satisfy Section 220’s procedural requirements.
Plaintiff held WCH stock when he served his November 26, 2025, demand.
Unlike Plaintiff’s three earlier demands, the November 26 demand was made under
oath after Plaintiff became a stockholder.72 Accordingly, only Plaintiff’s November
26, 2025, verified demand is properly before the Court and forms the basis for the
Court’s remaining analysis.
69
Id.
70
JX-11.
71
See generally 8 Del. C. § 220.
72
See generally JX-14.
19
F. Plaintiff’s Proper Purposes
Section 220 requires a stockholder to establish that the requested inspection
is sought for a proper purpose—that is, a purpose reasonably related to the person’s
interest as a stockholder. 73 Delaware courts have long recognized that valuing one’s
stock is a paradigmatic proper purpose under Section 220.74 Likewise, investigating
possible corporate mismanagement or breaches of fiduciary duty constitutes a proper
purpose where the stockholder establishes a credible basis from which the Court may
infer possible wrongdoing.75 Although the credible basis standard is the lowest
burden of proof recognized under Delaware law, it nevertheless requires some
evidence from which the Court may infer possible mismanagement. 76 I evaluate
Plaintiff’s asserted purposes under those principles.
Plaintiff asserts two proper purposes in his November Demand: to investigate
potential mismanagement, wrongdoing, and breaches of fiduciary duties; and
valuation of his equity interest. 77 Plaintiff contends that these purposes are
73
8 Del. C. § 220(b)(2).
74
See Bosse v. WorldWexDeb Corp., 2009 WL 2425718, at *1 (Del. Ch. July 30, 2009). 75
See Moran v. Unation, Inc., 2025 WL 3706330, at *6 (Del. Ch. Dec. 22, 2025) (“Delaware law recognizes a variety of purposes that are reasonably related to a person’s interest as a stockholder, including valuing one’s ownership interest and investigating possible waste, mismanagement, or breaches of fiduciary duty.”).
76
See generally Seinfeld v. Verizon Commc’ns, Inc., 909 A.2d 117, 123–25 (Del. 2006). 77
D.I. 1 at 3; JX-14. Although the Complaint characterizes Plaintiff's purposes as threefold, and the parties’ briefing largely conforms to that characterization, a stockholder cannot expand or alter the purposes stated in a Section 220 demand through subsequent
20
reasonably related to his interests as a WCH stockholder and justify inspection of
the requested books and records.
Defendant rebuts Plaintiff’s asserted proper purposes by arguing that
Plaintiff’s purposes regarding stock valuation and the IndusHealth Term Sheet are
purely personal and stem from Plaintiff’s role as co-founder of IndusHealth rather
than his role as a stockholder of WCH.78 Defendant also claims that Plaintiff’s
governance concerns lack a credible basis and that the chronology of Plaintiff’s
inspection demands demonstrate an effort to leverage Section 220 as a fishing
expedition and advance broader contractual disputes arising from the failed
IndusHealth transaction.79
Regarding Plaintiff’s proper purpose, Plaintiff’s purpose for valuation of his
WCH stock is a valid purpose because it is reasonably related to Plaintiff’s role as a
stockholder and is a recognized proper purpose under Section 220. A stockholder’s
interest in valuing his ownership interest lies at the core of the inspection rights
afforded by the statute. 80
litigation. Fuchs Fam. Tr. v. Parker Drilling Co., 2015 WL 1036106, at *4 (Del. Ch. Mar. 4, 2015). The Demand did not articulate an independent proper purpose directed to the IndusHealth or Term Sheet, and this report accordingly addresses the two purposes stated in the Demand itself.
78
D.I. 36 at 19–30.
79
Id. at 10, 29–30.
80
See Bosse, 2009 WL 2425718, at *1.
21
Plaintiff’s next purpose to investigate potential mismanagement is also a valid
purpose because Plaintiff has met his minimal credible basis burden by identifying
evidence supporting questions concerning the use of IndusHealth metrics stemming
from the discrepancies between the IndusHealth Term Sheet and WCH’s subsequent
conduct; questions arising from the November 2024 and April 2025 financing
rounds; and WCH’s sole-director structure, disclosed on December 1, 2025, which,
although insufficient by itself to establish wrongdoing, supports a targeted
inspection into the Company’s governance, among others. Taken together, these
facts satisfy Plaintiff’s minimal burden to establish a credible basis from which the
Court may infer possible corporate mismanagement or disclosure issues.
That conclusion does not, however, transform every subject identified in the
November Demand and subsequent Complaint into an independent proper purpose
for inspection. As previously noted, although the November Demand sought records
concerning IndusHealth and the Term Sheet, it did not separately identify evaluation
of WCH’s potential exposure arising from those matters as a purpose for inspection.
The Complaint later characterized Plaintiff’s purposes even more broadly to include
evaluating the Company’s exposure to potential claims arising from discrepancies
between the IndusHealth Term Sheet and representations made to investors. 81 To
the extent Plaintiff now advances that theory as an additional proper purpose, it must
81
D.I. 1 at 3.
22
independently satisfy Section 220’s requirement that the purpose be reasonably
related to Plaintiff’s interest as a WCH stockholder.
As such, Plaintiff does not satisfy his burden regarding his additional asserted
purpose of evaluating the Company’s exposure to potential claims arising from the
discrepancies between the IndusHealth Term Sheet and investor presentations,
because that purpose arises out of Plaintiff’s role in the transaction rather than his
role as a stockholder of WCH. Section 220 protects interests held in a stockholder
capacity, not personal contractual or transactional disputes.82 Therefore, Plaintiff’s
first and second asserted purposes constitute proper purposes under Section 220.
G. Plaintiff is Limited to Documents that are Necessary and Essential
Having concluded that Plaintiff established proper purposes for inspection,
the Court must determine the scope of the inspection to which Plaintiff is entitled.
Under the amended Section 220, inspection is limited to books and records that are
necessary and essential to accomplish the stockholder’s proper purposes. 83
WCH argues that the enumerated categories set forth in Section 220(a)(1)
ordinarily satisfy that standard and that inspection beyond those categories requires
Plaintiff to establish, by clear and convincing evidence, a compelling need for
82
8 Del. C. § 220 builds the stockholder-capacity limitation directly into its text, tying every element of the inspection right to the stockholder’s articulated purpose. 83
Moran v. Unation, Inc., 2025 WL 3706330, at *5 (Del. Ch. Dec. 22, 2025).
23
additional materials. 84 I agree. The Court, therefore, evaluates each category of
Plaintiff’s amended requests separately.
1. IndusHealth Definitive Agreements and Approvals
To the extent formal board-level records exist concerning the proposed
transaction, including board minutes, written consents, or board materials presented
to the sole director, those records fall within Sections 220(a)(1)(e)–(f) and shall be
produced. The record, however, does not establish that the proposed transaction was
ever formally approved by WCH’s board or sole director. Accordingly, if no such
formal records exist, WCH shall certify that no such records exist. Plaintiff has not
established, by clear and convincing evidence, a compelling need for third-party
operational files, transaction files, or other materials outside the categories
enumerated in Section 220(a)(1). Those requests are therefore denied.
2. Board-Level Materials Concerning the November 2024 and
April 2025 Financing Rounds
Plaintiff seeks records relating to WCH’s November 2024 and April 2025
financing rounds. Those records are necessary and essential to Plaintiff’s established
purpose of investigating the Company’s use of IndusHealth information and
disclosures made in connection with those financings. Accordingly, to the extent
they exist, WCH shall produce board minutes, written consents, and board materials
84
D.I. 36 at 35.
24
described in Sections 220(a)(1)(e)–(f) approving or relating to the November 2024
and April 2025 financing rounds, limited to materials from May 2024 forward that
are sufficient to reflect the basis for the board’s consideration of those transactions
and the materials presented in connection with them. Investor-facing pitch decks,
offering materials, or similar materials that were presented to or considered by the
board or sole director fall within Section 220(a)(1)(f) and shall be produced.
Plaintiff has not established, by clear and convincing evidence, a compelling need
for broader investor communications that were not presented to the board or sole
director. Those requests are therefore denied.
3. Valuation of Shares
Plaintiff seeks books and records necessary to value his ownership interest in
WCH. Because the Court has concluded that valuation constitutes a proper purpose
under Section 220, Plaintiff is entitled to those records necessary and essential to
accomplish that purpose. Accordingly, WCH shall produce the Company’s annual
financial statements for the three years preceding Plaintiff’s November 26, 2025
demand under Section 220(a)(1)(g), together with the current stock ledger and
capitalization table sufficient to permit Plaintiff to value his holdings. Plaintiff’s
request for informal communications relating to valuation is denied because Plaintiff
has not established, by clear and convincing evidence, a compelling need for
materials beyond those enumerated in Section 220(a)(1).
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4. Information Regarding Plaintiff’s Termination and
Accelerated Vesting
Plaintiff seeks records concerning his November 10, 2025, termination and
any resulting effect on his equity interest. Plaintiff relies on the Goal Sheet’s
provision providing for accelerated vesting if terminated without Cause and seeks
records concerning the approval of his termination and any determination regarding
Cause to resolve his share count and value his holdings. The termination records
that relate to his share count and equity interest are necessary and essential to
Plaintiff’s established purpose of valuing his ownership interest.
Accordingly, WCH shall produce board minutes, written consents, and board
materials within the categories identified in Section 220(a)(1)(e)–(f) concerning the
approval of Plaintiff’s November 10, 2025, termination and any determination
regarding Cause, limited to records reflecting the board’s action and the materials
presented in connection with that action. Plaintiff’s request for broader human
resources files and internal communications concerning his termination is denied
because those materials are not necessary and essential to accomplish Plaintiff’s
proper purposes.
5. Waiver-Related Materials
Plaintiff seeks documents presented to or created by directors or officers
concerning the inclusion or implementation of Section 15 of the Option Agreement.
This goes to his purpose of investigating potential mismanagement, wrongdoing,
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and breaches of fiduciary duty. WCH represents that no such board-level materials
exist beyond the executed Option Agreement itself. To the extent no board minutes,
written consents, or other board materials within the categories identified in Section
220(a)(1)(e)–(f) exist concerning Section 15, WCH shall certify that no such records
exist. Requests for communications with outside counsel concerning the drafting or
implementation of Section 15 are denied as protected by the attorney-client
privilege.
6. Remaining Requests for Communications and Other Broad
Categories of Documents
Plaintiff seeks communications concerning his equity interest, his
termination, the CEO’s alleged request to purchase Plaintiff’s shares, and various
requests seeking “any records” relating to those subjects. Those requests are denied.
They are overbroad, not confined to the categories of books and records identified
in Section 220(a)(1), or they concern matters personal to Plaintiff rather than
interests held in his capacity as a WCH stockholder.
Accordingly, Plaintiff has not established that those materials are necessary
and essential to accomplish his proper purposes, nor has he demonstrated a
compelling need for materials outside the categories enumerated in Section
220(a)(1). Plaintiff’s inspection is limited to the formal board-level materials and
financial records ordered above.
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H. Attorneys’ Fees, Costs, and Confidentiality
Plaintiff seeks fees and costs under Section 220(c) and the American Rule,
arguing that WCH unjustifiably refused his demand and employed overly aggressive
tactics.85 WCH argues it acted in good faith in relying on Section 15 of the Option
Agreement, the amended statute, and that Plaintiff’s earlier demands were
procedurally defective. 86
As noted in FON Holdings, “Delaware courts follow the American Rule that
‘each party is generally expected to pay its own attorneys’ fees regardless of the
outcome of the litigation.’ An exception exists in equity, however, when a party
litigates in bad faith. This Court has recognized that in ‘extraordinary
circumstances,’ ‘overly aggressive litigation strategies’ employed to improperly
resist a books and records demand may warrant fee-shifting. A party seeking to shift
fees must satisfy ‘the stringent evidentiary burden of producing ‘clear evidence’ of
bad faith ....’ To warrant fees, a litigant’s conduct must be ‘glaring[ly] egregious.’”87
As only Plaintiff’s November 26, 2025, demand satisfied Section 220’s
procedural requirements, and WCH advanced colorable arguments concerning the
enforceability of Section 15 and the scope of inspection under the amended statute,
85
D.I. 34 at 35–37.
86
See generally D.I. 36.
87
Jones v. FON Hldngs., LLC, 2024 WL 3508528, at *6 (Del. Ch. July 23, 2024) (internal citations omitted).
28
these circumstances do not warrant bad faith or an unjustified refusal. Under the
American Rule, fees may be shifted upon clear evidence of bad faith; a standard
which was not met on this record. The Court applies the American Rule and the bad
faith exception as articulated in FON Holdings and finds no clear evidence of bad
faith on this record. Plaintiff’s request for fee shifting and costs is, therefore, denied.
WCH also requests that any production ordered be subject to a confidentiality
order. 88 The present record does not reflect whether the parties have agreed upon an
appropriate confidentiality protocol or whether such relief remains disputed.
Accordingly, if the parties cannot reach an agreement, they may submit a proposed
confidentiality order or otherwise seek appropriate relief from the Court.
IV. SUMMARY OF PRODUCTION
A. Defendant SHALL produce the following books and records:
1. Board minutes and written consents responsive to 8 Del. C. §
220(a)(1)(e), from May 1, 2024, through the present, limited to those
concerning: (i) the approval of, or actions relating to, the IndusHealth
transaction; (ii) the November 2024 and April 2025 financing
transactions; (iii) the authorization or issuance of Plaintiff’s equity
interests, to the extent such matters were addressed at the board level;
and (iv) Plaintiff’s November 10, 2025 termination, including any
determination that Plaintiff was terminated for Cause.
2. Materials provided to the board (or sole director) in connection with the
foregoing actions, responsive to 8 Del. C. § 220(a)(1)(f), including any
investor presentations, offering materials, or comparable board
materials presented to or considered by the board in connection with its
approval of the November 2024 and April 2025 financings.
88
D.I. 36 at 47–48.
29
3. Annual financial statements for the three fiscal years preceding
November 26, 2025, responsive to 8 Del. C. § 220(a)(1)(g), together
with the current stock ledger and capitalization table sufficient to permit
Plaintiff to value his ownership interest.
B. The Court DENIES Plaintiff’s requests for:
1. Informal communications, including emails and text messages, that do
not fall within the categories of books and records identified in 8 Del.
C. § 220(a)(1)(e) or (f);
2. Generalized requests for “any records” or similarly open-ended
categories of documents; and
3. Individualized personnel, human resources, or contract files that were
neither presented to nor considered by the board.
C. Conditions of Inspection
1. Barring the filing of exceptions, the parties shall submit a stipulated
confidentiality order within fourteen (14) days of the issuance of this
Final Report. If the parties cannot reach an agreement, the parties may
submit a proposed confidentiality order or otherwise seek appropriate
relief from the Court.
2. Plaintiff’s request for an award of costs and expenses under 8 Del. C. §
220(c) is DENIED.
3. Plaintiff’s request for fee shifting under the bad-faith exception to the
American Rule is also DENIED.
V. CONCLUSION
For the reasons above, Plaintiff’s request to inspect WCH’s books and records
is GRANTED in part and DENIED in part. Plaintiff’s November 26, 2025, verified
demand is the only demand that satisfied Section 220’s procedural requirements and
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is the only demand properly before the Court. Plaintiff’s March 21, 2025, April 4,
2025, and October 20, 2025, demands are denied for failure to satisfy Section 220’s
stockholder-status and form-and-manner requirements.
The Court further concludes that Section 15 of the Option Agreement does
not bar Plaintiff’s November 26, 2025, verified demand. Plaintiff established proper
purposes to inspect books and records relating to the valuation of his ownership
interest and the investigation of potential corporate mismanagement. Plaintiff’s
inspection, however, is limited to those books and records that are necessary and
essential to accomplish those purposes and otherwise satisfy the limitations imposed
by the amended Section 220. All remaining requests are denied.
This is the Court’s Final Report and expedited exceptions may be filed within
three days under Court of Chancery Rule 144.
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