Cengage Advantage Books: Business Law Today, The Essentials 10th Edition by Roger LeRoy Miller

Exercise 19

Case Problem with Sample Answer-Rights of Shareholders. Stanka Woods is the sole member of Hair Ventures, LLC. Hair Ventures owns 3 million shares of stock in Biolustré, Inc. For several years, Woods and other Biolustré shareholders did not receive notice of shareholders' meetings or financial reports. When Woods learned that Biolustré planned to issue more stock, Woods, through Hair Ventures, demanded to see Biolustré's books and records. Biolustré asserted that the request was not for a proper purpose. Does Woods have a right to inspect Biolustré's books and records? If so, what are the limits? Do any of those limits apply in this case? Explain. [Biolustré, Inc. v. Hair Ventures, LLC, __ S.W.3d __ (Tex.App.-San Antonio 2011)] (See page 596.)