Aronson v. Lewis

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Aronson v. Lewis
Seal of the Supreme Court of Delaware.svg
CourtDelaware Supreme Court
DecidedMarch 1, 1984 (1984-03-01)
Citation(s)473 A.2d 805
Court membership
Judge(s) sittingJohn J. McNeilly, Andrew G. T. Moore II, Andrew D. Christie
Case opinions
Decision byMoore
Keywords

Aronson v Lewis, 473 A.2d 805 (Del. 1984),[1] is a US corporate law case, from Delaware concerning the possibility of a shareholder to bring a derivative suit.

Facts[edit]

A shareholder claimed that the directors of Meyers Parking System Inc. had improperly wasted corporate assets. The CEO, Mr Fink, then 75 years old, was also a 47% shareholder and its founder. It was alleged he personally selected the other directors. They had given to Mr Fink a generous five year employment contract, a subsequent term as a consultant with a large salary, and an annual bonus equal to 5% of the company's pre tax profits. The contract also said that this continued regardless of Mr Fink's continued ability to perform the job.

Judgment[edit]

Justice Moore rejected the claim on the ground that the plaintiff had not shown that making a demand on the board would have been futile. He held that the 'business judgment rule' was applicable. This meant,

a presumption that in making a business decision, the directors of a corporation acted on an informed basis in good faith and in the honest belief that the action was taken in the best interests of the company.[2]

See also[edit]

References[edit]

  1. ^ Aronson v. Lewis, 473 A.2d 805 (Del. 1984). This article incorporates text from this source, which is in the public domain.
  2. ^ Aronson, 473 A.2d at 812.

External links[edit]