MAURICE A. HARTNETT, III, VICE-CHANCELLOR.
Gentlemen:
This is an action whereby the plaintiffs seek to inspect the stockholder list of Pantry Pride, Inc., a Delaware corporation. After trial on November 20, 1984, I find that the request must be granted.
I
The annual meeting of the stockholders of Pantry Pride, Inc. is now set for December 6, 1984, a little over two weeks hence. Pantry Pride, Inc. has sent to its stockholders management's proxy materials and has also sent an amendment. Numerous references to a proxy fight involving Pantry Pride, Inc. have already appeared in the press.
The legal issue presented in this suit is unique because the original demand for the stockholder list was made on November 2, 1984, by Philip Devon, a stockholder. The demand was in order and in the normal course of events Philip Devon would have been entitled to inspect or receive the list of stockholders in order to communicate with them about the forthcoming annual meeting. Unfortunately, Philip Devon died on November 5, 1984.
On November 13, 1984, Dwight Devon, Dana Devon and Edward J. Landau, who were named Executors in Philip Devon's Will, were granted Preliminary Letters Testamentary by the New York Surrogate Court. The Executors desire to continue the solicitation of proxies commenced by Philip Devon and seek to inspect the stockholder list for that purpose.
Dwight Devon, one of the Executors, also desires to pursue the proxy solicitations on his own behalf and on November 6, 1984, he filed a new demand to inspect the stockholder list, although he was not a stockholder of record at that time because he did not own any shares of Pantry Pride, Inc. in his own name.
Dwight Devon was, however, subsequently able to register 565,424 shares of stock of Pantry Pride, Inc. in his own name on November 15, 1984. The shares had formerly been held in a Voting Trust which terminated upon his father's death.
On November 12, 1984, another demand for inspection of the stockholder list was made by Fred Mandato — another stockholder of Pantry Pride, Inc.
Pantry Pride, Inc. has failed to permit an inspection in response to any of the demands although it has offered to mail to its stockholders any communications the plaintiffs desire to have sent.
Dwight Devon, individually and as Co-Executor of the Estate of Philip Devon, filed Civil Action #7843. Fred Mandato filed Civil Action #7849. Both actions were consolidated for trial over the vigorous objections of the defendant.
II
It is clear from all the evidence that all the demands state a proper purpose: to solicit proxies. Kerkorian v. Western Air Lines, Inc., Del. Ch., 253 A.2d 221, aff'd., Del. Supr., 254 A.2d 240 (1969).
Any technical defect in the wording of the demands was cured at trial. Odyssey Partners v. Trans World Corp., Del. Ch., C.A. No. 7125-N.C., Hartnett, V.C., (Mar. 29, 1983); Hatleigh Corp. v. Lane Bryant, Inc., Del. Ch., C.A. No. 6318-N.C., Hartnett, V.C., (Feb. 5, 1981).
III
It is also clear that the demand made by Philip Devon before his death supports Dwight Devon's action and therefore Dwight Devon is entitled to the materials he seeks.
Dwight Devon, along with others on whose behalf he acts, has been issued Preliminary Letters Testamentary in New York. The New York Surrogate's Court Procedure Act (SCPA) grants executors the power to maintain an action that could have been maintained by the decedent. SCPA § 1412(3); New York Estates Powers and Trust Laws § 11-3.1.
10 Del. C. § 3701, as it now exists in its amended form, provides for a general survival of causes of action. Defendants concede as much but assert that the cause of action of Philip Devon had not yet ripened because five business days had not lapsed between the date of Philip Devon's demand and his death.
Defendant's argument that the course of action did not survive because it was not ripe is without merit. While Philip Devon was not entitled to receive the materials he sought on November 5, 1984 — the date of his death — because five business days had not expired since his demand, his right of inspection, or his right to compel inspection, did exist. It existed subject, however, to the requirement that the corporation had five business days in which to furnish the materials.
10 Del. C. § 3707 also provides that a statutory right of action shall survive unless it be specifically restricted in the statute.
The cause of action of Philip Devon therefore survived his death and may be maintained on behalf of the Estate by Dwight Devon, his Co-Executor.
IV
I find that defendants did not adduce sufficient evidence to establish the affirmative defenses of laches or unclean hands. This is merely an action seeking a stock list and other information necessary to conduct a proxy battle.
V
I also find that Dwight Devon was not a stockholder of record when he made his demand on November 6, 1984. He was only a beneficial owner at that time and because he sought relief pursuant to 8 Del. C. § 220 he is not entitled to an inspection based on his November 6, 1984, demand. Lenahan v. National Computer Analysts Corp., Del. Ch., 310 A.2d 661 (1973).
VI
It is not necessary to rule on Fred Mandato's request to be permitted to seek the materials in view of my ruling that Dwight Devon is entitled to the materials. Fred Mandato and Dwight Devon are allied in this ongoing proxy contest.
VII
Plaintiffs, in addition to seeking to inspect the stocklist of the defendant, also seek certain other materials which they need to meaningfully communicate with the stockholders of Pantry Pride, Inc. They are entitled to them. Goldman v. Aegis Corp., Del. Ch., C.A. No. 6396-N.C., Hartnett, V.C., (April 7, 1981);Hatleigh Corp. v. Lane Bryant, Inc., supra; Lerman v. Diagnostic Data, Inc., Del. Ch., C.A. No. 6233-N.C., Brown, V.C. (Aug. 11, 1980).
Defendants are directed to immediately furnish plaintiff Dwight Devon with copies of the demanded materials, and to continue to supply him with current materials as they become due.
Costs shall be assessed against defendant.
IT IS SO ORDERED.