Lewis v. Aronson - Civil Action #6919 (1982) - New Castle County, 1985 Del. Ch. LEXIS 431 (Ch. June 7, 1985)

Rule:

When divided loyalties are present, directorial interest exists. 

Facts:

Defendants filed a motion for re-argument of the court's previous decision, which denied defendants' motion to dismiss for failure to make a pre-suit demand under Del. Ch. Ct. R. 23.1 and found that the complaint sufficiently alleged facts which created a reasonable doubt that the majority of the directors were disinterested.

Issue:

Did the fact that certain individuals were outside directors of two of the three allegedly involved corporations preclude their being considered as interested for the purpose of considering a pre-suit demand where the corporations they serve stand on both sides of the transaction?

Answer:

No.

Conclusion:

The court held that the fact that certain individuals were outside directors of certain corporations did not preclude their being considered as interested for the purpose of considering a pre-suit demand where the corporations they served stood on both sides of the transaction. The court held that when divided loyalties were present, directorial interest existed. Further, the court found that the motion for re-argument was not timely filed. The excuse for the delay was that the existence of out-of-state co-counsel somehow precluded the prompt filing of the motion. The court found that this was not sufficient grounds not to comply with Del. Ch. Ct. R. 59(f).