Impact | Business Risk Management Blog

The officers and directors of a corporation are vested with broad protection in the management the entity’s affairs. This broad discretion can make it difficult for minority shareholders to ensure that those with majority control, often serving as the corporation’s management, are operating the entity to maximize value as opposed to promoting individual self-interest. However, the August 2014 decision by an Illinois Appellate Court in Sunlitz Holding Company v. Trading Block Holdings, Inc. shows that shareholders of Illinois corporations are not without protection. Shareholders are entitled to inspect an Illinois corporation’s books and records without proof of wrongdoing or mismanagement. Instead, assuming that a shareholder can articulate a “proper” purpose underlying the demand that goes beyond what may be termed “curiosity,” such review can be obtained – and on an expedited basis - even when the shareholder is not possessed of evidence of improper conduct by the officers and directors .