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In recent months, a debate has raged about whether Delaware companies should up stakes and reincorporate elsewhere, particularly Nevada or Texas. While this debate has sparked a great deal of discussion, and while a few high-profile companies have made the move, by and large the number of companies actually moving remained small. But now in a potentially significant development for the whole DExit topic, Silicon Valley VC firm Andreesen Horowitz has announced that it is leaving Delaware for Nevada, and, perhaps event more significantly, encouraging its portfolio companies to incorporate in Nevada as well. As discussed below, this development could represent an inflection point in the DExit debate, with potential significance for the corporate litigation going forward.Continue Reading Did the DExit Debate Just Hit an Inflection Point?

In order to try to stem the supposed tide of Delaware corporations reincorporating in other states (particularly Texas and Nevada), Delaware recently enacted a set of revisions to its corporate law. Whether or not the legislative changes are sufficient to reduce the number of so-called “DExits” remains to be seen. But the other states are not just standing by idly waiting to see what happens. They have been at work in their own corporate law laboratories. As discussed below, the legislatures of both Texas and Nevada have in recent days both passed significant revisions to their respective corporate laws. The changes not only represent significant shifts in the corporate law arena, but also could entail significant changes in the corporate litigation world, as well.Continue Reading Delaware Amended Its Corporate Laws, So Texas and Nevada Did, Too

John Orr

As I noted at the time, in late March, the Delaware legislature enacted important revisions to the state’s General Corporations Law. In the following guest post, John Orr, D&O Liability Product Leader for WTW’s FINEX practice, North America, takes a look at the new law and considers the D&O liability and insurance implications. This arrticle first appeared in WTW’s FINEX Observer publication (here) and was republished by the Harvard Law School Forum on Corporate Governance (here). I would like to thank John for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is John’s article.Continue Reading Guest Post: Changes in Delaware Corporate Law: A D&O Liability and Insurance Perspective

On Tuesday, March 25, 2025, the Delaware House of Representatives passed S.B. 21, the legislation designed to try to fight back against the move by some Delaware companies to reincorporate elsewhere, particularly in Texas or Nevada. The Delaware Senate previously passed the bill, which has been called the “most significant single-year revision of Delaware’s corporate code since at least 1967.   Delaware Governor Matt quickly signed the legislation the same day as the House passed the bill. While the legislation is primarily intended to try to stem the departures of Delaware companies to other states, it could also have a significant impact on future litigation in the state, as discussed below.Continue Reading Delaware Bill Meant to Stem Corporate Departures Enacted

As readers undoubtedly have noted, one of the hot topics these days is the question whether corporations should change their state of incorporation from Delaware to that of another state, usually either Nevada or Texas. The dialog on this topic was already underway when Elon Musk supercharged the conversation by vowing, in reaction to the Delaware court’s disallowance of his $56 billion pay package, to have Tesla change its state of incorporation from Delaware to Texas. I suspect that the state of incorporation debate is going to be with us for some time to come, making it important for those of us who might have to participate in (or at least listen to) the conversation to get a handle on the key differences between the states.Continue Reading Delaware or Another State: What’s the Difference?

From time to time, I am asked to speak directly to corporate boards of directors. I find these opportunities endlessly fascinating. Among other things, I learn so much from the directors’ questions. One frequently recurring question I get is:  what can directors do to avoid litigation or to be in a position better defend themselves if they are sued. The first thing I always talk about when asked these kinds of question is the importance of board minutes. Because this is one of my go-to talking points when I meet with boards, I was particularly pleased to see the recent post on the Harvard Law School Forum on Corporate Governance blog written by Leo E. Strine, Jr., the former Delaware Supreme Court Chief Justice and Chancellor, in which Strine highlights the importance of board minutes in corporate litigation. Strine’s comments are essential reading for anyone concerned with the liabilities of corporate directors. Strine’s April 4, 2024 article can be found here.Continue Reading The Importance of Board Minutes

Sam Vardy
Carey Lynn

One of the most important director and officer litigation risks is the possibility of a shareholder derivative lawsuit. In the following guest post Sam Vardy and Carey Lynn take an overview of derivative suits and discuss some of the important D&O coverage issues the cases present. Sam is a lawyer and Divisional Director, and Carey is a lawyer and Managing Director, in the Financial Lines division of Howden.  A version of this article was published previously on the Howden website. I would like to thank Sam and Carey for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Sam and Carey’s article.Continue Reading Guest Post: The Risks of Shareholder Derivative Suits and D&O Coverage

As I have noted in prior posts, conflicting political views about ESG-related issues have put corporate executives in the crosshairs, a dilemma that has caused some companies to try to avoid ESG issues altogether – a phenomenon that has been described as “greenhushing.” Among other concerns troubling corporate officials about the entire ESG debate is that some politicians have publicly raised the possibility that the act of taking ESG considerations into account in decision-making could itself constitute a breach of fiduciary duty.Continue Reading Disney, Fiduciary Duties, Business Judgment, and Corporate ESG-Related Actions