Chancery Court Dismisses Derivative Challenge to The Trade Desk CEO’s Compensation Award for Lack of Demand Futility

In re The Trade Desk, Inc. Derivative Litigation demonstrates the careful analysis the courts will engage in when conducting a Rule 23.1 demand futility challenge to assess both director independence and the likelihood of liability for the claims against the directors. This litigation was filed in 2022, and therefore was not impacted by the amendment of DGCL Section 144 earlier this year, which provided new procedural safe harbors for acts or transactions involving corporations and their directors, officers, controlling stockholders, and control groups. As a result, the court’s ruling and this post do not engage with the amended statute. Nevertheless, the court’s methodical analysis of director independence is informative of the factors that the Court of Chancery has found, and may continue to find, relevant to independence analyses. This ruling was affirmed on November 6, 2025 by the Supreme Court of Delaware on the basis of and for the reasons stated in the Memorandum of Opinion.