Delaware legislators set aside the protests of the main investors and approved accelerated legislation on Tuesday night that sponsors say they will protect their status as the world’s corporate capital after the criticisms of the billionaire ELON ALMIZCLE and other influential business titans shook public officials.
The bill is addressed to Governor Matt Meyer, a Democrat who met with corporate leaders about their concerns about judicial decisions that establish precedents that govern conflicts of corporate interests and urged legislators to quickly approve changes in the law.
They did it, sending the bill through both chambers within two weeks after their introduction, despite the lawyers of the shareholders, groups of consumers and pension funds that criticize it as a raffle of billionaires and corporate experts. The camera approved it on Tuesday night, 32-7, after a unanimous Senate in early March.
The experienced Corporate Law Courts of Delaware and their well developed corporate jurisprudence agency have become the reference destination to resolve all types of commercial disputes such as the legal home of more than 2 million corporate entities, including two thirds of Fortune 500 companies.
The State also reaps billions of dollars of the activity, which makes legislators nervous that corporations could flee from Delaware and undermine an important source of income that finances a third of the Delaware operational budget.
After two hours of debate on Tuesday, representative Krista Griffith told her colleagues that the bill was complex, but the reasons to vote for it were simple: “Protecting the economy economy, protecting future opportunities for people in our state. We have the best business court in the nation.”
However, an opponent, representative Madinah Wilson-Anton, referring to business courts as the “gold winner” of Delaware, warned that the changes that are being approved could end “cooking that golden goose.”
A legal challenge is widely expected after Meyer firm the bill.
In hearings, legislators and corporate lawyers and state officials warned that companies were contemplating to move their legal home, a “Dexit”, as has been called, and that new companies are advised to incorporate elsewhere, such as Nevada or Texas competitors.
Corporate leaders complained about the lack of predictability, clarity and equity, they were told legislators.
Last year, Musk criticized Delaware, saying “never incorporate your company into the state of Delaware” and, instead, recommended Nevada or Texas as destinations after a judge judge INVACIDADO your historical compensation package of Tesla It is worth potentially more than $ 55 billion.
Musk and Tesla are appellants in the Supreme Court of the State, and Musk – Tesla companies, Spacex and Neurable – Everyone departed from Delaware for Nevada or Texas.
The consequences seemed to accelerate in recent weeks when the Wall Street Journal reported That platform goal, the social media platform company Facebook, Instagram and WhatsApp, was considering moving its incorporation to Texas. Goal – Directed by billionaire president and CEO Mark Zuckerberg – The report did not confirm.
The bill has been very appetizing that it will incline the playing field decisively against investors, including pensioners and middle -class savers, and will make it difficult to hold the billionaires and corporate experts responsible for violating their fiduciary duty.
In a statement, the América consumer federation said that Delaware legislators “clearly could not protect investors with the approval of the billionaire bill.”
The opponents argue that the bill cancels decades of court precedents. But its sponsors say that it is only affecting the newest precedents, modernizing the law, clarifying the gray areas and maintaining the balance between corporate officials and shareholders.
The bill changes several provisions.
One grants corporate officials and the most protection controlle shareholders in certain cases of conflict of interest in state courts when fighting the demands of shareholders.
Two, limits the type of documents that a company must produce in judicial cases and make it difficult for shareholders to obtain access to internal documents or communication That could result in a long time and expensive for a company that produces, not to mention, damage your case.
Institutional investors warn that said law can incite them to push the corporations they have to incorporate into another place.
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Follow Marc Levy in X at: https://x.com/timelywriter.
