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An Introduction to the Law of Corporations: Cases and Materials

Aronson v. Lewis

In an earlier case (Shlensky v Wrigley) you were introduced the business judgment presumption. Remember that in Shlensky, the court ruled that absent some act of fraud or gross negligence that it would not second guess business decisions of a board of directors. This general deference to the board’s statutory role is known as the business judgment presumption and it plays out most commonly in cases where stockholders bring claims that boards have somehow violated their duty of care to the corporation. The case that follows, Aronson, is the leading restatement of the business judgment presumption.