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.
Judgmentedit
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]
Text of Aronson v Lewis, 473 A.2d 805 (Del. 1984) is available from:CourtListenerGoogle ScholarJustia
January 01, 1970
aronson, lewis, aronson, lewis, 1984, corporate, case, from, delaware, concerning, possibility, shareholder, bring, derivative, suit, courtdelaware, supreme, courtdecidedmarch, 1984, 1984, citation, 805court, membershipjudge, sittingjohn, mcneilly, andrew, moo. 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 Aronson v LewisCourtDelaware Supreme CourtDecidedMarch 1 1984 1984 03 01 Citation s 473 A 2d 805Court membershipJudge s sittingJohn J McNeilly Andrew G T Moore II Andrew D ChristieCase opinionsDecision byMooreKeywordsDirectors dutiesbusiness judgment rule Contents 1 Facts 2 Judgment 3 See also 4 References 5 External linksFacts editA 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 editJustice 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 editUnited States corporate law UK company lawReferences edit Aronson v Lewis 473 A 2d 805 Del 1984 nbsp This article incorporates text from this source which is in the public domain Aronson 473 A 2d at 812 External links editText of Aronson v Lewis 473 A 2d 805 Del 1984 is available from CourtListener Google Scholar Justia Retrieved from https en wikipedia org w index php title Aronson v Lewis amp oldid 1175138622, wikipedia, wiki, book, books, library,
