DExit

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Over the past couple of years, The D&O Diary has followed the growing “DExit” movement, including the increasing number of public companies that have either reincorporated outside Delaware or publicly explored doing so, and the resulting implications for corporate governance, shareholder litigation, and D&O risk.

To date, a key unanswered question has been whether changing a company’s state of incorporation would meaningfully alter litigation exposure in practice. An October 2, 2026, decision by the Texas Business Court involving Coinbase may be the first significant indication that it can.  A copy of the Coinbase decision can be found here.

At the same time, an October 23, 2026, Delaware Chancery Court opinion approving the $250 million settlement of the long-running Activision Blizzard merger litigation underscores a parallel development: even as some companies depart Delaware, Delaware courts continue to preside over some of the largest and most consequential shareholder cases in the country. Indeed, Chancellor Kathaleen McCormick described the Activision settlement as the largest cash recovery ever obtained in Delaware Court of Chancery litigation challenging a third-party merger. A copy of the Chancery Court’s approval of settlement and attorneys’ fees can be found here.

Continue Reading Texas Courts Begin to Define the Consequences of Reincorporation

In the following guest post, Ed Whitworth, the Head of Financial Lines at Inigo, Millie Refalo, Senior Underwriter at Inigo, and Yera Patel, Head of Casualty & Financial Lines Claims and Analytics at Inigo, summarize the results of a recent survey Inigo conducted of U.S. securities litigation defense counsel. The original of the survey summary previously was published on Inigo’s blog, here. We would like to thank Ed, Millie, Yera, and Inigo for allowing us to publish the report summary on this site.

Continue Reading Guest Post: Inigo’s 2026 Defense Counsel Survey

In recent years, the D&O Diary has followed the growing debate over whether companies should reincorporate outside Delaware, particularly in states such as Nevada and Texas.  We have also followed Delaware’s efforts to address the trend through measures including the enactment of SB 21 and the Delaware Supreme Court’s decision upholding the statute.

And we queried whether DExit could prove to be a new source of D&O exposure. A newly amended class action complaint against Dropbox may provide yet another example of that risk, as shareholders are challenging Dropbox’s reincorporation to Nevada, alleging that the move was undertaken to protect management and the controlling stockholder from accountability for underlying business and governance decisions.

Continue Reading Dropbox Derivative Suit Over a DExit

The directors’ and officers’ liability environment is always changing, but 2025 was a particularly eventful year, with important consequences for the D&O insurance marketplace. The past year’s many developments also have significant implications for what may lie ahead in 2026 – and possibly for years to come.  I have set out below the Top Ten D&O Stories of 2025, with a focus on future implications. Please note that on Thursday, January 15, 2026 at 11:00 am EST, my colleagues Marissa Streckfus, Chris Bertola, and I will be conducting a free, hour-long webinar in which we will discuss The Top Ten D&O Stories of 2025. Registration for the webinar can be found here. Please join us for the webinar.

Continue Reading The Top Ten D&O Stories of 2025

In the current heated DExit debate over whether companies incorporated in Delaware should reincorporate elsewhere (usually Texas or Nevada), one factor often cited is the expense of litigating in Delaware, usually as a shorthand reference to a contention that plaintiffs’ counsel’s fee awards in Delaware’s court are out of control. This argument typically cites to a few recent cases in which the fees awarded unquestionably were large; recent academic studies have taken the argument further to contend that the fees awarded in some cases were excessive.

However, a more recent study, based on a comprehensive overview of all Delaware court fee awards in the last ten years, challenges the premise that fee awards are out of control; the study finds, rather, that fee awards generally have been within reasonable bounds, and argues that a very small number of outliers should not drive the analysis of the issues. The study concludes that Delaware’s flexible approach to fee awards provides the appropriate incentives for plaintiffs’ counsel and includes safeguards to protect against excessive fee awards. Perhaps most significant in light of the current controversy is the study’s authors’ finding that “we find no evidence that Delaware fees are systematically excessive.”

Continue Reading But ARE Plaintiffs’ Counsel Fee Awards in Delaware Excessive?

In the following guest post, Ed Whitworth, the Head of Financial Lines at Inigo, and Yera Patel, Head of Casualty & Financial Lines Claims and Analytics for Inigo, summarize the results of a recent survey Inigo conducted of U.S. securities litigation defense counsel. The original of the survey summary previously was published on Inigo’s blog, here. I would like to thank Ed, Yera, and Inigo for allowing me to publish the report summary on this site. I welcome guest post submissions from responsible authors on topics of interest to the blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article. 

Continue Reading Guest Post: Inigo’s 2025 Defense Counsel Survey

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 late March, in order to try to stop a perceived flood of Delaware companies reincorporating in other states (in particular, Nevada and Texas), the Delaware legislature enacted a significant re-write of important sections of its General Corporation Law (DGCL).  Even though it has just been a few short weeks since the Delaware legislation was enacted, it is not too early to start asking whether the legislative changes will stop Delaware companies from reincorporating in other states. As discussed below, early indications seem to suggest that notwithstanding the legislative changes, at least some Delaware corporations will continue to seek to reincorporate elsewhere.

Continue Reading Will Delaware’s Recent Corporate Law Revisions Stop Reincorporations?