Lewis v. Anderson

In Lewis v. Anderson (Del.Supr. 1984) 477 A.2d 1040, the Delaware Supreme Court held that "a plaintiff who ceases to be a shareholder, whether by reason of a merger or for any other reason, loses standing to continue a derivative suit." (At p. 1049.) The Chancery Court had dismissed an Old Conoco shareholder's derivative action, asserted on behalf of Old Conoco, on that very ground. ( Id. at p. 1041.) In footnote 18, the Delaware Supreme Court noted it was unnecessary to decide whether dismissal of the derivative suit should be conditioned upon New Conoco, who now owned the derivative claim, entering an appearance for the purpose of taking over the claim. New Conoco already was a party to the suit and had joined in the motion to dismiss the Old Conoco shareholder's derivative suit on the ground that the shareholder lacked standing. In this context, the court stated, "since dismissal is not on the merits, New Conoco is not thereby precluded from prosecuting the underlying claim against former management . . . ." ( Id. at p. 1050, fn. 18.)