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Introduction to the Law of Corporations: Cases and Materials

UFCWU v. Zuckerberg

Demand Futility Standard

For many years, Delaware had two different demand futility standards (Aronson & Rales). Application of the standards depended on the facts presented in the complaint and they could sometimes be confusing. In Zuckerberg the Chancery Court undertook to simplify, without overturning, application of these standards. The Chancery Court's approach was endorsed by the Delaware Supreme Court in this opinion. It's worth keeping in mind that the old standards (Aronson & Rales) are still good law and have not be overruled. Rather, the court has created a new, unified application of those standards that is intended to simplify and improve pleading.