A stockholder and former employee who was forced out of a startup company providing cloud-based temperature monitoring may examine the firm’s books and records, the Delaware Court of Chancery ruled Tuesday, rejecting arguments that his status had been properly rescinded.
Vice Chancellor Tamika Montgomery-Reeves ruled that Jon Henry, a Rockland County, New York-based businessman, who sued to aid in his investigation into allegations of mismanagement by directors of Phixios Holdings Inc., was not aware of the company’s stock-transfer rule—which the firm said would govern his status as a shareholder—when he joined the company in 2015. Nor did he agree to be bound by its provisions, which allow a majority of the company’s stockholders to revoke securities if a stockholder is determined to be actively harming the company, Montgomery-Reeves wrote in a 44-page opinion.
