MARY E. CAIN AND JAMES D. CAIN V. MERCK & CO., INC.
f/k/a SCHERING-PLOUGH CORPORATION
A-2138-08T2 08-17-10
We construe N.J.S.A. 14A:5-28(4) of the New Jersey Business
Corporate Act as allowing shareholders with a proper purpose to
inspect the minutes of the board of directors and executive
committee. However, this right of inspection is limited to
those portions of the minutes that are pertinent to the
shareholder's proper purpose and should not be confused with a
discovery order. Further, unsubstantiated allegations of
mismanagement do not constitute a proper purpose; rather, a
shareholder who asserts investigation of mismanagement as a
proper purpose must come forward with specific, supported and
credible allegations of mismanagement in order to be entitled to
the inspection.
