Delaware lawmakers to vote on controversial corporate law changes

Delaware lawmakers are set to vote on a significant change to the state's corporate laws. This vote is scheduled for Thursday and comes amid criticism that the new law mainly benefits wealthy shareholders. The proposed bill makes it more challenging for investors to sue over some transactions. This includes situations where controlling shareholders sell their businesses or engage with board members and executives. However, it does not change the rules for takeovers by controlling shareholders. Law firms representing shareholders have labeled the proposal as "the billionaire's bill," fearing it could harm ordinary investors. The legislation, known as SB 21, arises at a time when a few companies have hinted at leaving Delaware. This has raised alarms about a potential "DExit," as other states compete to attract businesses. Despite these concerns, Delaware continues to host many large public companies, which contribute significantly to the state's budget. Supporters of the bill argue it is necessary to keep Delaware appealing to corporations. They highlight that many companies are reconsidering their presence in the state, including major names like Dropbox and Meta Platforms. Legal experts have expressed serious concerns, stating that investors will have limited options to challenge corporate deals if the bill passes. Opponents of the bill argue it was pushed through without proper input from shareholder attorneys and criticize its rushed nature. They claim it favors companies like Meta, suggesting that it protects its CEO, Mark Zuckerberg, from legal challenges related to shareholders' investigations. Despite the pushback, the state senate has already approved the bill. Governor Matt Meyer has indicated he will sign it into law once it passes the house. The governor's office has denied any direct lobbying by Meta regarding the bill. Overall, the debate highlights tension between protecting corporate interests and ensuring fairness for investors in Delaware's corporate landscape.