David Grobow v. H. Ross Perot Book Reviews

David Grobow v. H. Ross Perot by Supreme Court of Delaware Book Summary

HORSEY, Justice: In these consolidated shareholder derivative suits, plaintiffs-shareholders appeal the Court of Chancery's dismissal of their
suits for failure of plaintiffs to make presuit demand under Court of Chancery Rule 23.1. The Court of Chancery held that
plaintiffs' complaints as amended failed to allege particularized facts which, if taken as true, would excuse demand under
the demand futility test of Aronson v. Lewis, Del. Supr., 473 A.2d 805 (1984). The Court interpreted Aronson's "reasonable
doubt" standard for establishing demand futility as requiring plaintiffs to plead particularized facts sufficient to sustain
"a judicial finding" either of director interest or lack of director independence, or whether the directors exercised proper
business judgment in approving the challenged transaction placing the transaction beyond the protection of the business judgment
rule. Grobow v. Perot, Del. Ch., 526 A.2d 914, 921 (1987). We find the Vice Chancellor to have erred in formulating an excessive
criterion for satisfying Aronson's reasonable doubt test. Moreover, the Vice Chancellor erred in his statement that fairness
is a "pivotal" question under an Aronson analysis. See 526 A.2d at 927. Unless the presumption of the business judgment rule
is overcome by the pleadings, questions of fairness play no part in the analysis. Aronson, 473 A.2d at 812. However, applying
the correct standard, we conclude that the complaints (singly or collectively) fail to state facts which, if taken as true,
would create a reasonable doubt either of director disinterest or independence, or that the transaction was other than the
product of the Board's valid exercise of business judgment. Therefore, we affirm the decision below, finding the Court's
error to have been harmless.

👋 Do you love David Grobow v. H. Ross Perot books? Please share your friends!

David Grobow v. H. Ross Perot (Supreme Court of Delaware) Book Reviews 2024

Supreme Court of Delaware - David Grobow v. H. Ross Perot Discussions & Comments

Have you read this book yet? What do you think about David Grobow v. H. Ross Perot by Supreme Court of Delaware book? Ask the bookpedia.co community a question about David Grobow v. H. Ross Perot!