Michael O'Neill v. Summit Materials, Inc.

COURT OF CHANCERY
OF THE
STATE OF DELAWARE
BONNIE W. DAVID COURT OF CHANCERY COURTHOUSE
VICE CHANCELLOR 34 THE CIRCLE
GEORGETOWN, DE 19947

Date Submitted: December 4, 2025
Date Decided: December 19, 2025

Gregory V. Varallo, Esquire Douglas D. Herrmann, Esquire
Mae Oberste, Esquire Cassandra L. Thompson, Esquire
Bernstein Litowitz Berger & Troutman Pepper Locke LLP
Grossmann LLP 1313 Market Street, PO Box 1709
500 Delaware Avenue, Suite 901 Wilmington, DE 19899
Wilmington, DE 19801

RE: Michael O’Neill v. Summit Materials, Inc.,
C.A. No. 2025-0695-LM (BWD)

Dear Counsel:

This letter opinion resolves exceptions to a Magistrate in Chancery’s post-trial

oral ruling in a books and records action. In her ruling, the Magistrate Judge

concluded that the stockholder plaintiff lacks a proper purpose to inspect books and

records because he already filed a plenary action challenging the same purported

wrongdoing that he seeks to investigate through his demand. For reasons that

follow, the plaintiff’s exceptions are denied and the Magistrate Judge’s final report

denying inspection is adopted.
Michael O’Neill v. Summit Materials, Inc.,
C.A. No. 2025-0695-LM (BWD)
December 19, 2025
Page 2 of 14

I. BACKGROUND

The following facts are drawn from the Magistrate in Chancery’s October 1,

2025 post-trial oral final report (the “Final Report”) and the record developed at a

September 23, 2025 trial.1

Prior to February 2025, plaintiff Michael O’Neill (“Plaintiff”) was a

stockholder of Summit Materials, Inc. (“Summit”), a Delaware corporation that

produces and supplies aggregates, cement, ready-mix concrete, asphalt paving mix,

and concrete products; and owns and operates quarries, sand and gravel pits, six

cement plants, cement distribution terminals, ready-mix concrete plants, asphalt

plants, and landfill sites. JX 12 at 2; Pl.’s Opening Br. in Supp. of His Exceptions

to the Magistrate’s Final Report [hereinafter OB] at 8, Dkt. 35.

In January 2024, Summit combined with Argos North America Corp. JX 3 at

1. In that transaction, nonparty Grupo Argos S.A. (“Grupo Argos”), a Colombian

entity, received $1.2 billion in cash and approximately 54.7 million shares of

Summit common stock, representing roughly 31% of the combined entity. JX 4 at

2, 8. At that time, Summit and Grupo Argos entered into a stockholder agreement

1
Tr. of 10-1-2025 Telephonic Report of the Magistrate on Pl.’s Request for Inspection of
Books and Rs. [hereinafter Final Report], Dkt. 34. Joint exhibits are cited as “JX __” unless
otherwise defined.
Michael O’Neill v. Summit Materials, Inc.,
C.A. No. 2025-0695-LM (BWD)
December 19, 2025
Page 3 of 14

under which Grupo Argos obtained certain consent rights and was entitled to

nominate three directors to Summit’s eleven-member board of directors. JX 2 at 4,

14. Summit and Grupo Argos also entered into a restrictive covenant agreement that

prohibited Grupo Argos from competing with Summit within the United States and

parts of Canada for a period of five years (the “Non-Compete”). JX 1 at 2–3.

Less than a year later, on November 24, Summit and nonparty Quikrete

Holdings, Inc. (“Quikrete”) entered into a merger agreement under which Quikrete

agreed to acquire Summit in an all-cash merger for $52.50 per share of Summit

common stock (the “Merger”). Final Report at 4; JX 10 at 2. Grupo Argos agreed

to support the Merger in exchange for Quikrete’s agreement that Summit would

waive the Non-Compete. Final Report at 4; JX 10 at 45–46, 51.

On January 14, 2025, Plaintiff served a books and records demand on

Summit’s board of directors pursuant to 8 Del. C. § 220 (“Section 220”) to

investigate possible wrongdoing in connection with the Merger (the “Demand”).

Final Report at 4; JX 12 at 1. On January 29, Plaintiff and Summit entered into a

Books and Records Access Agreement (the “Standing Agreement”) to preserve

Plaintiff’s standing to seek books and records after the Merger closing. JX 15 at 1.

The Merger closed on February 10. JX 17 at 1.
Michael O’Neill v. Summit Materials, Inc.,
C.A. No. 2025-0695-LM (BWD)
December 19, 2025
Page 4 of 14

On February 17, Delaware legislators introduced Senate Bill 21 (“S.B. 21”)

in the Delaware General Assembly, proposing amendments to Sections 144 and 220

of the Delaware General Corporation Law. Del. S.B. 21, 153d Gen. Assem. (2025)

[hereinafter S.B. 21], available at https://legis.delaware.gov/BillDetail/141857. The

amendments to Section 144 define a “[c]ontrolling stockholder” to include a person

that, together with such person’s affiliates and associates,

[h]as the power functionally equivalent to that of a stockholder that
owns or controls a majority in voting power of the outstanding stock of
the corporation entitled to vote generally in the election of directors by
virtue of ownership or control of at least one-third in voting power of
the outstanding stock of the corporation entitled to vote generally in the
election of directors.

S.B. 21 § 144(e)(2)(b); see also 8 Del. C. § 144(e)(2)(c).

On February 25 (eight days after S.B. 21 was introduced), Plaintiff initiated a

plenary action in this Court, alleging claims for breach of fiduciary duty in

connection with the Merger (the “Plenary Action”). JX 20 at 1, 26–28; see Verified

Class Action Compl., C.A. No. 2025-0209-MTZ, Dkt. 1. Plaintiff filed that action

hoping to outrun the effect of the new legislation. But on March 12, Delaware

legislators introduced Senate Substitute 1 for S.B. 21 in the Delaware General

Assembly, which made clear that the amendments would have retroactive effect for

proceedings commenced after February 17, i.e., the day that S.B. 21 was first
Michael O’Neill v. Summit Materials, Inc.,
C.A. No. 2025-0695-LM (BWD)
December 19, 2025
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introduced. Del. S. Sub. 1 for S.B. 21, 153d Gen. Assem. (2025), codified at 8 Del.

C. §§ 144, 220, available at https://legis.delaware.gov/BillDetail/141930.

Having failed to circumvent the new statute, Plaintiff dismissed the Plenary

Action without prejudice and turned back to his books and records request. Notice

of Voluntary Dismissal Without Prejudice, C.A. No. 2025-0209-MTZ, Dkt. 12.

Months later, on June 20, Plaintiff initiated the present action seeking to enforce the

Demand. Verified Compl. for Breach of Contract and to Compel Produc. of Books

and Rs. Pursuant to 8 Del. C. § 220, Dkt. 1. The action was assigned to a Magistrate

in Chancery, who held a trial on a paper record on September 23. Dkts. 2, 26. On

October 1, the Magistrate Judge issued her Final Report, denying Plaintiff’s

inspection request. Dkt. 29; Final Report at 15. The Magistrate Judge found that

Plaintiff lacked a proper purpose for inspection, relying on precedent holding that “a

stockholder does not act with a proper purpose when seeking to use Section 220 to

investigate matters that have already been placed at issue in a plenary . . . action.”

Final Report at 7. The Magistrate Judge acknowledged narrow exceptions to that

“general rule,” but concluded that the present facts did not fall into those exceptions,

emphasizing that “[P]laintiff in this instance initiated the problem by rushing to file

a [P]lenary [A]ction” and the “sequence of events” was the result of “[P]laintiff’s

own strategic decisions.” Id. at 9, 11.
Michael O’Neill v. Summit Materials, Inc.,
C.A. No. 2025-0695-LM (BWD)
December 19, 2025
Page 6 of 14

Plaintiff filed exceptions to the Final Report on October 1. Dkt. 28. Briefing

was completed on December 4. Dkts. 35–36, 38. Oral argument is unnecessary.

II. ANALYSIS

I have reviewed the trial record and the Magistrate in Chancery’s

determinations de novo. DiGiacobbe v. Sestak, 743 A.2d 180, 184 (Del. 1999).

Good cause does not exist to expand the record. See Ct. Ch. R. 144(e).

“To inspect books and records under Section 220, a plaintiff must establish

by a preponderance of the evidence that the plaintiff is a stockholder, has complied

with the statutory form and manner requirements for making a demand, and has a

proper purpose for conducting the inspection.” Pettry v. Gilead Scis., Inc., 2020 WL

6870461, at *9 (Del. Ch. Nov. 24, 2020). “If a stockholder meets these requirements,

the stockholder must then establish ‘that each category of the books and records

requested is essential and sufficient to the stockholder’s stated purpose.’” Id.

(quoting Thomas & Betts Corp. v. Leviton Mfg. Co., 681 A.2d 1026, 1035 (Del.

1996)). “In other words, the court must give the petitioner everything that is

‘essential,’ but stop at what is ‘sufficient.’” KT4 P’rs LLC v. Palantir Techs. Inc.,

203 A.3d 738, 751–52 (Del. 2019) (citation omitted).

As the Magistrate in Chancery explained in her Final Report, “Delaware

courts have recognized that a stockholder who files a plenary action asserting claims
Michael O’Neill v. Summit Materials, Inc.,
C.A. No. 2025-0695-LM (BWD)
December 19, 2025
Page 7 of 14

of mismanagement undercuts his alleged need to obtain documents under Section

220 to investigate the same alleged acts of mismanagement.” Schnatter v. Papa

John’s Int’l, Inc., 2019 WL 194634, at *11 (Del. Ch. Jan. 15, 2019), abrogated in

part on other grounds by Tiger v. Boast Apparel, Inc., 214 A.3d 933 (Del. 2019).

When a stockholder files a plenary action challenging the same issues he seeks to

investigate through his demand, he “effectively concede[s] that the books and

records he seeks are not necessary or essential to his stated purpose of investigating

mismanagement or wrongdoing.” Bizzari v. Suburban Waste Servs., Inc., 2016 WL

4540292, at *6 (Del. Ch. Aug. 30, 2016); see also, e.g., King v. VeriFone Hldgs.,

Inc., 12 A.3d 1140, 1148 (Del. 2011) (acknowledging that dismissal of a later-filed

Section 220 action was proper when the “stockholder-plaintiff’s plenary derivative

complaint was still pending and the plenary court had not granted the plaintiff leave

to amend”); An v. Archblock, Inc., 2023 WL 7320253, at *3 (Del. Ch. Nov. 7, 2023)

(holding that “the 220 Complaint must be dismissed as a matter of law because

[p]laintiff has already filed a plenary action challenging the same purported

wrongdoing that he seeks to investigate through the [d]emand”), R. & R. adopted,

2024 WL 1365983 (Del. Ch. Apr. 1, 2024); CHC Invs., LLC v. FirstSun Cap.

Bancorp, 2019 WL 328414, at *5 (Del. Ch. Jan. 24, 2019) (recognizing that absent

“special circumstances, the problems inherent in parallel plenary and Section 220
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December 19, 2025
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actions defeat [a plaintiff’s] purpose for inspection”); Cent. Laborers Pension Fund

v. News Corp., 2011 WL 6224538, at *2 (Del. Ch. Nov. 30, 2011) (concluding that

a stockholder was “unable to tender a proper purpose for pursuing its efforts to

inspect” books and records because its “currently-pending derivative action

necessarily reflect[ed] its view that it had sufficient grounds for alleging both

demand futility and its substantive claims without the need for the assistance

afforded by Section 220”), aff’d, 45 A.3d 139 (Del. 2012); Baca v. Insight Enters.,

Inc., 2010 WL 2219715, at *4 (Del. Ch. June 3, 2010) (“[A] stockholder does not

act with a proper purpose when the stockholder attempts to use Section 220 to

investigate matters that the same stockholder already put at issue in a plenary

derivative action.”); Taubenfeld v. Marriott Int’l, Inc., 2003 WL 22682323, at *3

(Del. Ch. Oct. 28, 2003) (explaining that filing a derivative action “was a

certification under Rule 11 that the plaintiffs had enough information to support their

allegations”).

Plaintiff raises three primary arguments on exceptions. First, Plaintiff

contends that the numerous cases cited above were all implicitly overruled by the

Delaware Supreme Court’s 2020 decision in AmerisourceBergen Corp. v. Lebanon

County Employees’ Retirement Fund, 243 A.3d 417 (Del. 2020). OB at 33. In

AmerisourceBergen, the Supreme Court clarified that when a stockholder states a
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C.A. No. 2025-0695-LM (BWD)
December 19, 2025
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proper purpose for inspection by demonstrating a credible basis to investigate

possible wrongdoing, he is not required to “state in the demand all of the ways [he]

might use the documents uncovered in the investigation.”2 AmerisourceBergen, 243

A.3d at 429. AmerisourceBergen further held that a stockholder pursuing an

investigation is not required to “demonstrate that the wrongdoing or mismanagement

[will be] actionable” in a lawsuit,3 since the stockholder may “use the information

obtained for more than one purpose.” Id. at 431. AmerisourceBergen did not,

however, upend well-worn case law explaining that a stockholder who files a plenary

lawsuit challenging alleged misconduct has certified that the information he already

has is sufficient for his purpose, such that he has no further need for books and

records to investigate the same alleged misconduct.

2
Plaintiff seems to suggest that under AmerisourceBergen, even if a stockholder has
sufficient information to bring a lawsuit, he may need additional information to pursue
other ends of his investigation. See OB at 36. Without foreclosing the possibility that this
could be true under different facts, it is not the case here, where Plaintiff seeks to investigate
a Merger post-closing. He identifies no conceivable “end” for his inspection other than
filing a lawsuit, which he has already done.
3
Plaintiff conflates actionability with proper purpose. AmerisourceBergen’s holding that
“[t]he stockholder need not demonstrate that the alleged mismanagement or wrongdoing is
actionable” is entirely consistent with the Magistrate Judge’s ruling, supported by case law,
that “post-plenary demands undermine the stockholder’s” proper purpose for seeking
books and records. 243 A.3d at 437; Final Report at 7–8. The filing of a plenary case is
not the type of “merits-based defense” that ordinarily should not be considered in a Section
220 action because it “interferes with” the summary nature of the proceeding.
AmerisourceBergen, 243 A.3d at 437.
Michael O’Neill v. Summit Materials, Inc.,
C.A. No. 2025-0695-LM (BWD)
December 19, 2025
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Second, Plaintiff argues that even if the decisions cited above remain good

law, the present facts are exceptional and support a different outcome. OB at 38.

“Despite problems inherent in the sue first, ask questions later sequence, in special

circumstances, Delaware courts have enforced a stockholder’s Section 220 rights

notwithstanding the stockholder’s pending plenary complaint.” CHC Invs., 2019

WL 328414, at *3 (internal quotation marks omitted). Plaintiff relies on two cases

presenting “special circumstances”—King v. VeriFone Holdings, Inc. and Khanna

v. Covad Communications Group, Inc. The Magistrate Judge correctly concluded

that the narrow exceptions recognized in those cases are inapplicable here.

In King, a stockholder plaintiff filed a plenary action in California federal

court. 12 A.3d at 1141. The California court dismissed the claims with leave to re-

plead and encouraged the plaintiff to demand books and records to improve his

complaint. Id. at 1150. The Delaware Supreme Court upheld the plaintiff’s right to

inspection, explaining that “it is a proper purpose under Section 220 to inspect books

and records that would aid the plaintiff in pleading demand futility in a to-be-

amended complaint in a plenary derivative action, where the earlier-filed plenary

complaint was dismissed on demand futility-related grounds without prejudice and

with leave to amend.” Id. But “[i]t was, in [King], the judicial determination that

the allegations were not sufficient coupled with the judicially-granted leave to
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C.A. No. 2025-0695-LM (BWD)
December 19, 2025
Page 11 of 14

amend that eliminated the inconsistency that one may find in the simultaneous filing

of two related actions, as happened here.” News Corp., 2011 WL 6224538, at *1.

By contrast, here, while Plaintiff chose to dismiss the Plenary Action, “no judicial

action . . . occurred that would suggest a need or a reason for further pleadings or

efforts to gather important facts to support a cognizable purpose for an inspection of

[Summit]’s books and records.” Id. (emphasis added).

In Khanna, a stockholder plaintiff filed suit to enforce his inspection rights

under Section 220, then one month later, brought a class and derivative action out of

concern that his claims would become time-barred. 2004 WL 187274, at *1, *3

(Del. Ch. Jan. 23, 2004). The Court concluded that the plaintiff had not waived his

right to pursue his demand, explaining that “the overlap of the Section 220 action

and the Derivative Action [had been] attributable to [the defendant’s] failure to

comply with its obligations under Section 220.” Id. at *4. Unlike in Khanna,

Summit’s supposed delay in producing books and records did not cause Plaintiff to

run up against a statute of limitations, prejudicing Plaintiff’s rights.4 Whatever

4
Summit also accommodated Plaintiff with the Standing Agreement, which gave Plaintiff
a contractual right to pursue books and records after the Merger closing extinguished
Plaintiff’s statutory standing.
Michael O’Neill v. Summit Materials, Inc.,
C.A. No. 2025-0695-LM (BWD)
December 19, 2025
Page 12 of 14

“pressure” Plaintiff may have felt to pursue the Plenary Action while legislation was

pending, Summit was not responsible for it.

Alternatively, Plaintiff argues that the facts of this case present special

circumstances justifying a new exception to the general rule precluding a

stockholder from seeking books and records after filing a plenary suit. I agree with

the Magistrate Judge that a departure from our existing case law is unwarranted.

Plaintiff argues that the law changed after he filed his Plenary Action, so any

concession that “he had enough information to state a claim under the [old law]

. . . does not mean that Plaintiff has conceded that he has enough information today.”

OB at 40–41; RB at 15. Plaintiff says he was “comfortable that he could state a

claim under the then-applicable law based on the publicly available facts and

applicable law,” but he is no longer so confident. OB at 4. Yet Plaintiff does not

explain why a codification of the definition of a controlling stockholder requires

further factual investigation into the Merger now, when he concluded that the public

record was sufficient to investigate possible breaches of fiduciary duty previously.5

5
Plaintiff asserts that “[u]nder the law that governed at the time, these facts would likely
have established Grupo Argos as the Company’s controlling stockholder.” OB at 4, 40.
That is perhaps not as self-evident as Plaintiff suggests, given that Grupo Argos held just
31% of the company’s voting power and appointed only three of eleven directors to the
board. See Turnbull v. Klein, 2025 WL 353877, at *10 (Del. Ch. Jan. 31, 2025) (“Pleading
actual control is ‘no easy task.’” (quoting Larkin v. Shah, 2016 WL 4485447, at *13 (Del.
Michael O’Neill v. Summit Materials, Inc.,
C.A. No. 2025-0695-LM (BWD)
December 19, 2025
Page 13 of 14

Plaintiff argues that “[i]t would have been malpractice” not to pursue the

Plenary Action before the statutory amendments took effect because Grupo Argos

held less than one-third of Summit’s voting power. See OB at 4. Plaintiff’s litigation

strategy was his own. By choosing to pursue the Plenary Action, he forwent books

and records. His sophisticated counsel no doubt knew that was the choice they were

making.

Finally, Plaintiff asserts that the Magistrate Judge overlooked the Standing

Agreement, which separately preserved his right to books and records. OB at 31.

This argument was not fairly presented to the Magistrate Judge, and in any event

fails on the merits. The Standing Agreement preserved Plaintiff’s standing to seek

books and records after the Merger closing by contractually replicating his statutory

inspection right:6

Ch. Aug. 25, 2016))); see also, e.g., Flannery v. Genomic Health, Inc., 2021 WL 3615540,
at *14 (Del. Ch. Aug. 16, 2021) (concluding that a complaint did not adequately allege that
a 25% stockholder that appointed only two of eight directors was a controller); Larkin,
2016 WL 4485447, at *14–15 (concluding that a complaint did not adequately allege that
a 23.1% stockholder affiliated with three of nine directors was a controller); In re Morton’s
Rest. Gp., Inc. S’holders Litig., 74 A.3d 656, 665 (Del. Ch. 2013) (concluding that a
complaint did not adequately allege that a 27.7% stockholder affiliated with two of ten
directors was a controller).
6
See In re Zendesk, Inc. Section 220 Litig., 2023 WL 5496485, at *7 n.76 (Del. Ch. Aug.
25, 2023) (noting that analyzing inspection rights under Section 220 or a standing
agreement leads to the same result), R. & R. adopted, (Del. Ch. 2023).
Michael O’Neill v. Summit Materials, Inc.,
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December 19, 2025
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The Company agrees that, for the period of one year after the execution
of this Agreement, Stockholder shall continue to have the same right,
power, and ability to enforce the Demand as Stockholder had prior to
the closing of the [Merger]. In connection with any such lawsuit
asserted by Stockholder during that one-year time frame, the Company
shall not argue or present any defense that Stockholder lacks standing
to enforce the Demand following the closing of the [Merger]; provided,
however, that the Company reserves all arguments in opposition to any
further production under 8 Del. C. § 220.

JX 15 at 2 (emphasis omitted). Nowhere in the Standing Agreement did Summit

waive its right to argue that Plaintiff lacked a proper purpose for seeking books and

records based on his later decision to pursue a plenary action.

III. CONCLUSION

After de novo review, I am satisfied that Plaintiff’s exceptions should be

denied and that the Final Report must be adopted.

Sincerely,

/s/ Bonnie W. David

Bonnie W. David
Vice Chancellor

cc: All counsel of record (by File & ServeXpress)