State of incorporation

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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?

Sarah Abrams

Last fall the U.S. Supreme Court dismissed, as improvidently granted, the writ of certiorari in two pending securities lawsuits, including in the Meta Platforms/Facebook case (as discussed here). The Court’s dismissal of the writ of certiorari in the Facebook case had obvious implications for the immediate litigants in the case, as it left the prior circuit court ruling standing. But the dismissal also has important implications for litigants in other cases involving the same issues as were raised in the Facebook case.

In the following guest post, Sarah Abrams, Head of Claims Baleen Specialty, a division of Bowhead Specialty, considers the implication for those other litigants in those other cases in light of the Supreme Court’s dismissal of the writ of certiorari in the Facebook case. I would like to thank Sarah for allowing me to publish her article as a guest post on this site. I welcome guest post submissions from responsible authors in topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah’s article.Continue Reading Guest Post: Location, Location, Location

Sarah Abrams

One of the current hot topics is corporate and securities law is whether Delaware companies should reincorporate in other states, particularly in the states of Nevada or Texas. In the following guest post, Sarah Abrams, Head of Claims Baleen Specialty, a division of Bowhead Specialty, examines the state of incorporation of the new Texas Stock Exchange, which, surprisingly, turns out to be Delaware. I would like to thank Sarah for allowing me to publish her article on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah’s article.Continue Reading Guest Post: The TXSE is Domiciled in Delaware

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?

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

One of the hot topics in the corporate space over the last several months has been the question whether Delaware corporations should consider reincorporating in another state, such as Texas or Nevada. Much of the discussion in this re-domestication debate has centered on recent controversial decisions out of Delaware’s courts. The ongoing discussion of these issues resurfaced in the last few days with the news that Delaware Chancellor Katherine McCormick had rejected Tesla’s motion for reconsideration of her earlier rejection of Elon Musk’s $55.8 billion pay package.

A recent law review article by Yale Law Professor Jonathan R. Macey addresses the question whether, in light of the recent case law developments in the state’s courts, Delaware corporations will now be “Leaving for Las Vegas.” Professor Macey’s article considers the extent to which recent Delaware case law developments may motivate key Delaware constituents to consider incorporation alternatives. As discussed below, Professor Macey’s article has in turn triggered further discussion of the central questions about the recent output of Delaware’s courts in corporate and securities lawsuits.Continue Reading Will Delaware Corporations Be “Leaving for Las Vegas”?

It is an idea that suddenly is all the rage – that companies should shake the Delaware dust off their feet and reincorporate elsewhere. Elon Musk has famously said, in the wake of the Delaware Chancery Court’s decision voiding his $55.8 billion pay package, that he will seek to reincorporate Tesla in Texas. (SpaceX, also a Musk company, has in fact already reincorporated in Texas.) The former Attorney General William Barr and another GOP official published a Wall Street Journal column arguing that Delaware’s courts are driving corporations away (as discussed here), and suggesting that companies increasingly will find it more attractive to be incorporated in Nevada or another state. Some companies have indeed left Delaware and reincorporated elsewhere – including not just SpaceX, but also TripAdvisor, for example. Why would a company change its state of incorporation from Delaware to another state? And with reference to the focus of  this blog, does a company’s redomestication from Delaware to another state have implications for the potential liability exposures of the company’s directors and officers?Continue Reading Does a Del. Corp.’s Reincorporation in Another State Reduce D&O Liability Exposure?

By now, readers are well aware that ESG has become a politically divisive issue. In a series of variations on this theme, two conservative legal commentators, writing in a Wall Street Journal op-ed column, argue that ESG is a trojan horse for progressive political objectives that, if Delaware’s courts continue their current course, could cost the state its privileged position as the preferred jurisdiction for corporate organization. The November 25, 2023 Journal op-ed, which was written by former U.S. Attorney General William Barr and Washington Attorney and former Department of Labor official Jonathan Berry, and is entitled “Delaware is Trying Hard to Drive Away Corporations,” can be found here.Continue Reading Will Delaware’s Embrace of an “ESG Agenda” Cause Corporations to Flee?

One of the hotly contested issues in recent years has been whether or not there is D&O insurance coverage for shareholder appraisal actions. In a recent decision that was largely focused on choice of law issues, the Delaware Supreme Court affirmed the trial court’s dismissal of a policyholder’s action to try to obtain coverage for defense costs incurred in an underlying shareholder appraisal action. Though the insurers prevailed in this coverage dispute, the Court’s holding on the choice of law issues could have ominous implications for insurers’ prospects in future coverage disputes, as discussed below. The Delaware Supreme Court’s January 10, 2023, opinion in the Stillwater Mining Company coverage dispute can be found here.Continue Reading Delaware Supreme Court: No Coverage for Appraisal Action