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Court of Chancery Explains "Validly In Litigation"

In re: Affiliated Computer Services, Inc. Shareholders Litigation, C.A. 2821-VCL (Del. Ch. Feb. 6, 2009)


Determining when a derivative complaint should be dismissed becomes complicated when the composition of the board of directors changes. What board do you look to to determine if a demand must be made on the board before suit may proceed? You start by looking at the board that existed at the time the complaint was filed. If demand on that board was excused, then the case was "validly in litigation" and may proceed even if the board composition later changes to include a majority of disinterested directors.



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