Pomerantz Wins StoneMor Section 220 Trial
Pomerantz, on behalf of our client, an individual shareholder acting as plaintiff, scored a victory in its pursuit of a books and records request against (“StoneMor” or the “Company”) pursuant to Section 220 of the Delaware General Corporation Law (“Section 220”).
StoneMor owns and operates more than 300 cemeteries and 80 funeral homes in the United States, offering products and services including caskets, burial lots and mausoleum crypts.
On December 31, 2019, the Company completed a series of reorganization transactions that effectively converted it from a Delaware limited liability company into a Delaware corporation. Pursuant to the corporation conversion, the plaintiff received shares of StoneMor stock in exchange for his units of the StoneMor limited partnership.
On June 9, 2020, the plaintiff served Stonemor’s Board with a Section 220 demand seeking to inspect certain books and records of the Company (and its former entity as a limited partnership). To narrow the issues, and resolve any problems alleged by the Company regarding the June 2020 demand, the plaintiff served the Board with a new demand on March 9, 2021. StoneMor denied these requests.
On March 25, 2021, Pomerantz, acting on behalf of the plaintiff, filed an action against StoneMor, seeking access to information about a related-party transaction involving StoneMor’s controlling stockholder. The plaintiff also sought internal StoneMor documents regarding a series of transactions that resulted in the controlling stockholder receiving a majority ownership stake in the company prior to its conversion from a Delaware master limited partnership to a Delaware Corporation.
Following a Section 220 trial, the Delaware Chancery Court immediately ruled from the bench in favor of Pomerantz’s client on July 21, 2021, granting access to the requested documents. The review of these Board-level documents will enable Plaintiff to continue his investigation of possible wrongdoing, mismanagement, and/or potential breaches of fiduciary duties at StoneMor.
The case is Lewis Titterton v. StoneMor, Inc., C.A. No. 2021-0259-SG (Del. Ch.).