[DOWNLOAD] "Senior Aronson v. Harry Lewis" by Supreme Court of Delaware # Book PDF Kindle ePub Free
eBook details
- Title: Senior Aronson v. Harry Lewis
- Author : Supreme Court of Delaware
- Release Date : January 01, 1984
- Genre: Law,Books,Professional & Technical,
- Pages : * pages
- Size : 69 KB
Description
In the wake of Zapata Corp. v. Maldonado, Del. Supr., 430 A.2d 779 (1981), this Court left a crucial issue unanswered: when is a stockholder's demand upon a board of directors, to redress an alleged wrong to the corporation, excused as futile prior to the filing of a derivative suit? We granted this interlocutory appeal to the defendants, Meyers Parking System, Inc. (Meyers), a Delaware corporation, and its directors, to review the Court of Chancery's denial of their motion to dismiss this action, pursuant to Chancery Rule 23.1, for the plaintiff's failure to make such a demand or otherwise demonstrate its futility. 1 The Vice Chancellor ruled that plaintiff's allegations raised a reasonable inference that the directors' action was unprotected by the business judgment rule. Thus, the board could not have impartially considered and acted upon the demand. See Lewis v. Aronson, Del. Ch., 466 A.2d 375, 381 (1983). We cannot agree with this formulation of the concept of demand futility. In our view demand can only be excused where facts are alleged with particularity which create a reasonable doubt that the directors' action was entitled to the protections of the business judgment rule. Because the plaintiff failed to make a demand, and to allege facts with particularity indicating that such demand would be futile, we reverse the Court of Chancery and remand with instructions that plaintiff be granted leave to amend the complaint.