Delaware Business Litigation Report

Delaware Supreme Court Explains How To Do The Director Interest Test

Delaware Country Employees Retirement Fund v. Sanchez, No. 702, 2014 (October 2, 2015)

Deciding if a director is sufficiently tied to a controller so as to be disqualified from passing on a transaction independently is an important decision because it may determine if a derivative suit meets the demand excuse test.

In this decision the Supreme Court holds that determination must be based on all the circumstances taken together as a whole and not by just taking each connection separately.

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