473 A.2d 805 (Del. 1984)
Aronson v. Lewis is a seminal case in corporate law, particularly regarding the procedural intricacies of derivative suits wherein shareholders seek to enforce the rights of a corporation.
Under what circumstances can a shareholder be excused from making a demand on the board of directors before bringing a derivative suit?
The court established the 'demand futility' test, which requires a plaintiff to demonstrate that there is reason to 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.
The Delaware Supreme Court held that Aronson had not sufficiently demonstrated demand futility, affirming the dismissal of his derivative suit for failing to make a demand on the board.
Aronson v. Lewis is critical for corporate law students because it outlines the procedural strategy when dealing with derivative suits. The decision highlights the threshold for challenging directorial decisions and emphasizes the importance of distinguishing between business judgments and potential breaches of fiduciary duties. Furthermore, it underscores Delaware's influence on corporate governance, with the test applied in this case being subsequently adopted and refined in jurisdictions across the U.S.