Delaware Seeks Corporate Law Reform as Elon Musk, Dropbox, Meta Eye Exit Over Chancery Court Rulings

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Updated Mar 11, 2025, 11:01 PM

Delaware is facing a potential overhaul of its corporate law codes, prompted by concerns that business leaders, including Elon Musk, might move their companies out of the state. A public legislative hearing on the proposed changes is scheduled for Wednesday, aiming to address these fears and retain Delaware's status as a preferred jurisdiction for incorporation. The push for reform comes after several high-profile companies, including Dropbox and Meta, have considered reincorporating in other states like Nevada, following a series of rulings by the Delaware Court of Chancery. These rulings, including one by Chancellor Kathaleen McCormick that nullified a significant compensation package for Elon Musk at Tesla, have sparked a backlash and led to discussions about moving incorporation elsewhere. Delaware Governor Matt Meyer has been actively involved in discussions about these reforms. In a recent interview, he emphasized the importance of maintaining Delaware's competitive edge in corporate governance while acknowledging some dissatisfaction among corporate leaders with the state's business court. He noted that 81% of the United States' initial public offerings (IPOs) in 2024 were Delaware-incorporated companies, and the state hosts nearly 2.2 million entities, including two-thirds of the Fortune 500. Support for the reform bill has come from major law firms, indicating a broad consensus within the legal community about the need for changes to Delaware's corporate law to prevent further exodus of companies. The proposed changes are seen as crucial for maintaining Delaware's position as the leading jurisdiction for corporate incorporation.

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#Delaware #Elon Musk #Dropbox #Meta #Nevada #Delaware Court of Chancery #Kathaleen McCormick #Tesla #Matt Meyer #United States #Fortune 500

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Sawyer Merritt

@SawyerMerritt

NEWS: Elon Musk has kicked off his appeal today to try to restore his $56 billion payday from Tesla, claiming a lower court judge made multiple legal errors in rescinding the record compensation. The 2018 pay package resulted in spectacular growth for the electric vehicle maker… https://t.co/uJadi9osjG