Publication Date
2012
Abstract
The Georgia Court of Appeals, in Mannato v. SunTrust
Banks, Inc., held that O.C.G.A. § 14-2-1602 abrogated all
common law rights to inspect corporate records. As a
result, shareholders in Georgia owning less than 2% of a
corporation'soutstandingshares suddenly lost the right to
petition a court to grant access to a corporation's books
and records. This Note argues that the Mannato decision
was incorrect. The Georgia Court of Appeals failed to
notice the significant procedural differences that existed
between the statutory and common law right of inspection
and erroneously applied Georgia's established law of
statutory abrogation. The court also brushed aside the
rather explicit preservationof the common law in O.C.G.A.
14-2-1602(f) by placing limitations on the statutory
language not found within the statute itself.
The errors in Mannato have altered the balance between
corporate oversight and corporate freedom. Rather
suddenly, large numbers of corporate shareholders have
been barred absolutely from using one of their most
effective tools for ensuring the relative security of their
interests. The Mannato decision should be overruled or
not followed. If its authority persists, the Georgia
legislature should remedy the consequences of Mannato by
removing the 2% restrictionfrom their code. In so doing,
Georgia would restore powerful oversight abilities to
shareholders who have suffered as of late from the
economic downturn, precipitated in part by corporate
misdirection.
Recommended Citation
O'Sullivan, Ruari J.
(2012)
"Skimming From the 2%: The Status of Georgia's Restrictions on Shareholder Access to Corporate Information,"
Georgia Law Review: Vol. 46:
No.
3, Article 14.
Available at:
https://digitalcommons.law.uga.edu/glr/vol46/iss3/14