On October 3, 2014, the Delaware Chancery Court issued its ruling in Wolst v. Monster Beverage Corporation, C.A. No. 9154-VCP (Del. Ch. October 3, 2014) (Noble, V.C.), rejecting the plaintiff’s request to inspect Monster Beverage Corporation’s books and records pursuant to Section 220 of the Delaware General Corporation Law.
The plaintiff’s stated purpose for her request to inspect Monster’s books was to determine whether there was a basis for her to bring a derivative suit against Monster based on insider trading that occurred seven years ago. A class action regarding the insider trading had been settled for $16.25 million and a prior derivative suit, in which the plaintiff had been a participant, had been dismissed for failure to make a demand on the Board. Subsequently a demand on the Board had been made and rejected.
The Court held that the possible new derivative suit that was the reason for the plaintiff’s Section 220 demand was time-barred by laches. Further, Vice Chancellor Noble refused to extend to derivative claims the general rule that a class action tolls the statute of limitations for the members of the class pursuing individual direct claims.