Delaware Business Court Insider

‘Conversations are happening:’ clients haven’t stopped asking their attorneys whether Delaware is their best option for incorporation

Delaware Business Court Insider

Delaware’s newly-enacted changes to its corporate code were designed to keep the state attractive to corporations and keep the revenue they bring to state coffers.

In the first weeks following the passage of Senate Bill 21, litigators and transactional attorneys are still having the same conversations with their clients weighing the pros and cons of incorporating in Delaware as opposed to emerging jurisdictions like Texas or Nevada, each of which have been taking actions of their own to attract corporations in recent months.

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Do sharpened definitions in Delaware’s corporate law amendments afford a ‘clear playbook’ or place Chancery in ‘straitjacket’?

Delaware Business Court Insider

Much of the debate about Delaware Senate Bill 21 stems from proposed amendments to Section 144 of the DGCL, including more concrete parameters for who qualifies as a controlling shareholder, what makes a director independent and how a deal can be shielded from the entire fairness standard.

Supporters of SB 21, which has been passed by the Senate and is scheduled to go before the House Judiciary Committee this week, say the so-called safe harbor procedures outlined in the legislation would give corporations clarity on how to properly proceed with a transaction and ultimately cut down on the number of transactions challenged in the Court of Chancery.

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‘This Is Our Industry’: Why lawyers say Delaware’s economic future turns on bill to amend corporate law

Delaware Business Court Insider

Whether wide-ranging revisions to Delaware corporate law in Senate Bill 21 are accepted or rejected, advocates on both sides say there will be fallout for Delaware’s economy and the corporate and legal work that drives it.

Those who oppose SB 21 say they’re worried it would be detrimental to Delaware’s legal industry, with less corporate work available for law firms as breach of fiduciary duty cases that would otherwise be litigated in the Court of Chancery and appealed to the Delaware Supreme Court are precluded by the changes proposed in the bill, while legislators, lawyers and other Delawareans who have expressed support for the bill posit that without a course correction, the state will hemorrhage corporations and the revenue they provide, jeopardizing funding for government operations and public services.

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Here’s why SB 21’s drafting process has gotten as much heat as its content

Delaware Business Court Insider

It’s the second consecutive year in which legislation proposing amendments to the Delaware General Corporation Law has been criticized both for its content and for the process through which it was drafted and sent through the Legislature.

So far, SB 21’s legislative progression hasn’t been outright faster than that of the most recent bills proposing DGCL amendments in prior years. Last year, SB 313, containing what were referred to as “market practice amendments,” was passed by the Senate 22 days after introduction, and the chamber passed the 2023 DGCL amendment bill 12 days after its introduction. The Senate approved SB 21 on March 13, 23 days after it was first introduced.

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Will an ‘increasingly litigious environment’ in Delaware drive incorporation out of state?

Delaware Business Court Insider

February has seen the start of another wave of discussion about Delaware’s place in the corporate law world, with the release of a Supreme Court decision, talk of large corporations redomesticating and commentary from Delaware’s new governor all coinciding.

Rumors of Meta potentially leaving Delaware for Texas surfaced on Jan. 31. The same day, Dropbox released a statement indicating plans to reincorporate in Nevada, claiming Nevada’s strategy of codifying corporate law is more predictable than Delaware law’s tendency to be shaped by litigation.

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Here’s what corporate litigators expect Delaware courts to address in 2025

Delaware Business Court Insider

Delaware ended 2024 with some litigation cliffhangers, leaving corporate attorneys seeking answers from the Delaware Supreme Court on several issues that were addressed in the Court of Chancery.

One area of Delaware law that came up frequently in 2024 and is expected to continue to be closely watched as more case law is established is that of conflicted controller transactions, specifically what exactly constitutes such a transaction and how judicial scrutiny can be applied to one.

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The ‘next battleground’ in Chapter 11: Third Circuit set to weigh opt-out releases

Delaware Business Court Insider

In the months leading up to argument over the Boy Scouts of America’s reorganization plan before the Third Circuit, questions about third-party releases in bankruptcy have been addressed by a handful of other courts.

While it’s not the only issue in play on appeal, those opposed to the confirmed Chapter 11 plan that’s been effective since April 2023—specifically, a subset of sexual abuse accusets whose compensation is a key part of the plan and a group of Boy Scout insurers—have spent years challenging the opt-out third-party releases that were part of a global settlement within the plan, confirmed by Delaware Bankruptcy Court Judge Laurie Selber Silverstein and upheld by U.S District Court Judge Richard G. Andrews.

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Even with new business courts, Texas is a long way from taking Delaware’s corporate law mantle

Delaware Business Court Insider

Texas has a new system of business courts up and running on the heels of an ongoing conversation about Delaware’s corporate primacy.

While Texas attorneys have been upfront with their hope that the state’s newest courts will help raise Texas’ corporate law to Delaware’s level, corporate attorneys across the country are all but unanimous: Delaware remains the champ, and that’s not changing, at least not any time soon.

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Here’s what Texas attorneys are expecting from the state’s new business courts

Delaware Business Court Insider

The first handful of cases have been filed in Texas’ business courts, and Texas attorneys are looking forward to seeing how their dockets continue to unfold.

Many are optimistic about the courts’ potential but expect it will take at least a year to build up the jurisprudence that could make them a reliable venue for business litigation.

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‘A big black box’?: What to expect now that the DGCL has been amended

Delaware Business Court Insider

Amendments to the Delaware General Corporation Law approved by the legislature and Gov. John Carney become effective Aug. 1, generally addressing three areas of corporate governance in response to three Court of Chancery decisions issued within the past year.

The latest batch of changes has seen less unanimous support from the corporate bar than the amendment process usually does, with one area in particular drawing criticism: In response to Moelis & Co. shareholder litigation decided in February, Section 122 will now allow corporate boards to use their discretion to sign agreements giving governance rights to shareholders they previously could not have under Section 141(a).

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