Aronson v. Lewis

In Aronson v. Lewis (473 A2d 805 [Del 1984], the court set forth a test concerning whether alleged improper actions on the part of the directors would make a shareholder demand prior to instituting litigation futile. In such cases, demand is excused if the derivative complaint pleads particularized facts creating a reasonable doubt that "(1) the directors are disinterested and independent or (2) the challenged transaction was otherwise the product of a valid exercise of business judgment." (Id. at 814.) Where the derivative lawsuit does not assert a particular action by the board of directors, the test was stated in Rales v. Blasband (634 A2d 927 [Del 1993]). In such actions, the shareholder plaintiff must demonstrate that "the particularized factual allegations . . . create a reasonable doubt that, as of the time the complaint is filed, the board of directors could have properly exercised its independent and disinterested business judgment in responding to a demand." (Id. at 934.)