A Delaware court has dismissed a complaint filed by Max Glass against RWA Company, LLC, which sought to compel the company to produce its books and records. The court ruled that Glass's demand was improper because it was related to ongoing litigation and did not meet the legal standards required for such requests.
This ruling affects Glass, a member of RWA, who sought access to company records to assess the value of his membership interest and investigate potential mismanagement. The decision highlights the challenges members face when attempting to access corporate records while simultaneously engaged in litigation.
Background
Max Glass is a member of RWA Company, a Delaware limited liability company based in West Palm Beach, Florida. RWA was formed to facilitate decentralized governance and provide consulting services to institutional borrowers in decentralized finance. Glass holds vested Class B membership units in the company.
The dispute began when Glass sent a formal written demand to RWA on October 22, 2025, requesting to inspect certain books and records necessary to value his interest and investigate potential mismanagement. He sought documents such as the current Operating Agreement, board meeting minutes, and financial statements for the years 2022 to 2024.
RWA initially agreed to provide some documents after a confidentiality agreement was signed. However, Glass claimed that the company failed to provide essential board minutes and resolutions. After further correspondence, RWA denied his requests, stating that they were not reasonably related to his stated purpose and amounted to an impermissible fishing expedition.
The Ruling
The court ruled on October 19, 2026, that RWA's motion to dismiss Glass's complaint should be granted. The court found that Glass's stated purposes for the demand—to value his membership interest and investigate potential mismanagement—were improper. The ruling stated, "Delaware courts have recognized that a stockholder who files a plenary action asserting claims of mismanagement undercuts his alleged need to obtain documents under Section 220 to investigate the same alleged acts of mismanagement."
The court emphasized that when a stockholder files a plenary action, it undermines their claim of needing additional documents through a separate demand. The judge noted that Glass's ongoing litigation regarding similar issues made the demand for records unnecessary.
Impact
This ruling sets a significant precedent regarding the limits of a member's rights to inspect company records when involved in concurrent litigation. It reinforces the principle that a member cannot use a records request to circumvent the discovery process in a related case.
For members of companies in similar situations, the ruling indicates that they must pursue their inquiries through the appropriate legal channels in ongoing litigation rather than through separate demands for records. This could limit the ability of members to gather information while litigation is pending.
What's Next
Glass has the option to appeal the ruling, although the opinion does not specify whether he will do so. Additionally, the related case, Glass v. DiPrisco et al., continues to progress through the court system, where the issues of mismanagement and fiduciary duties are still under consideration.