Kerfuffle in Delaware, here’s an overview from AP. I’ve been busy elsewhere this afternoon, can you all share details about what’s going on?
HARRISBURG, Pa. (AP) — Delaware is trying to protect its status as the corporate capital of the world with fast-tracked legislation amid fallout from a judge’s rejection of billionaire Elon Musk ’s landmark Tesla compensation package, although critics say the bill will tilt the playing field against investors, including pensioners and middle-class savers.
After three-plus hours of hearing testimony Wednesday, a Delaware House committee voted to advance the bill, which Democratic Gov. Matt Meyer says will ensure the state remains the “premier home for U.S. and global businesses” to incorporate.
Backers say it’ll modernize the law, clear up gray areas and maintain balance between corporate officers and shareholders in a state where the courts, for a century, have settled all sorts of business disputes as the legal home of more than 2 million corporate entities, including two-thirds of Fortune 500 companies.
Critics — including institutional investors, pension funds and asset managers — say it’ll lower corporate governance standards, curb shareholder rights and, as a result, make it harder to hold corporate officers accountable for decisions that violate their fiduciary duty.
The bill passed the state Senate unanimously last week and could get a full House vote this month.
What happened in Elon Musk’s case?
A Delaware judge last year invalidated Musk’s compensation package from Tesla that was potentially worth more than $55 billion after shareholders’ lawyers had sued over the package that Tesla’s board of directors awarded Musk in 2018.Chancellor Kathaleen St. Jude McCormick ruled that it had been developed by directors who weren’t independent of Musk and approved by shareholders who had been given misleading and incomplete disclosures in a proxy statement.
The ruling bumped Musk out of the top spot on Forbes’ list of wealthiest people, although he has since climbed back up.
Musk and Tesla are appealing in the state Supreme Court. But Musk unloaded on Delaware, saying “Never incorporate your company in the state of Delaware” and instead recommended competitors Nevada or Texas as destinations.
Now, lawmakers are being warned by corporate lawyers that their clients are considering heading to the exits — making a “Dexit,” as it’s been dubbed — and that startups are being advised to incorporate elsewhere.
What did Musk and others do?
Must took his own advice, moving Tesla’s corporate listing to Texas after a shareholder vote and his companies SpaceX to Texas and Neuralink to Nevada.Backers of the bill say corporate unrest had been simmering the past couple years over various Delaware Supreme Court decisions in corporate conflict-of-interest cases and that Musk inflamed the discontent.
The fallout seemed to accelerate in recent weeks when the Wall Street Journal reported that Meta Platforms — the parent company of social media platforms Facebook, Instagram and WhatsApp — was considering moving its incorporation to Texas. Meta didn’t confirm the report.
DropBox, the online file-sharing platform, moved its corporate listing to Nevada, and Bill Ackman, founder of Pershing Square Capital Management, a major hedge fund, said he’d leave Delaware, too.
On Feb. 1, Musk took to his social media platform X to crow about it, saying, “Companies are flooding out of Delaware, because the activist chief judge of the Delaware court has no respect for shareholder rights.”
That said, critics of the bill say there’s no evidence that corporations are fleeing Delaware in any numbers and that Delaware lawmakers are simply bending to pressure from billionaires.
Opponents include The California Public Employees’ Retirement System, or CalPERS, and New York City’s comptroller’s office, which is a trustee of city pension funds.
What does the bill do?
It changes several things.One, it gives corporations more protections in conflict-of-interest cases — such as a pay package for a CEO or intercompany agreements — in state courts when fighting shareholder lawsuits.
Two, it limits the kind of documents that a company must produce in court cases and makes it harder for stockholders to get access to internal documents or communication that could prove time-consuming and expensive for a company to produce — not to mention, damaging to its case.
Eric Talley, a Columbia University law professor, has compiled a running list of three dozen Delaware Supreme Court precedents that he said the legislation stands to overturn.
Lawrence Hamermesh, a former professor at Widener University’s Delaware Law School, disagreed. Hamermesh, who helped draft the legislation after Meyer asked him last month, said perhaps only a couple doctrines would be wiped out.
A legal challenge is widely expected should Meyer get and sign the bill. Meanwhile, institutional investors say such a law may prompt them to push corporations that they own to incorporate elsewhere.
Why is this a big deal for Delaware?
Money.Approximately one-third of Delaware’s state government revenue — about $2.2 billion — comes from corporate license fees and associated tax revenues, according to the governor’s office. That helps the state to maintain a 0% sales tax and keep property taxes relatively low, a nice perk for the beach vacation home industry along its Atlantic coast.
Beyond that, Wilmington is home to a cottage industry that caters to the corporate lawyers who live, stay, dine and shop around the state Supreme Court and the Chancery Court of Delaware buildings where they argue their cases.
Old School
Won’t something think of the poor corporations? They’re people too!
JerseyBeard
The Billionaire philosophy boiled down: I’m going to screw you, you’re allowed to shut up about it.
Impressively genius.
WhatsMyNym
There must be a reason that California based companies didn’t use Texas or Nevada to incorporate before. It will interesting to hear what the downside is.
mrmoshpotato
@Old School:
I’m thinking of Mitt Romney’s slappable face.
Steve LaBonne
Just because we don’t feature crude exchanges of big bags of cash like in a bad movie, doesn’t mean we aren’t a highly corrupt country and getting worse by the day.
trollhattan
DoJ says what?
The DOJ is aiming to get these cases to the Supreme Court, where it’s betting that enough of the right-wing justices will agree to overturn the high court’s own precedent on independent agencies — encapsulated primarily in a 1936 case called Humphrey’s Executor — and axe the removal protections that keep leadership at such entities as the NLRB or MSPB insulated from political will or vindictiveness.
HT Digby
Wapiti
Fuck the states competing to win the “screwing over people” race.
Seriously, I’d prefer to have everything operate under one set of rules. Have the Feds collect all of the taxes and distribute it to the states by population. Variable taxation by state and locality becomes a way to keep the poor poor and to advantage the wealthy.
trollhattan
@WhatsMyNym:
Our law banning non-compete clauses would be a compelling reason to do it elsewhere.
“We demand our right to control people post-employment.”
Gretchen
@Wapiti: That’s why poor neighborhoods have crummy schools and wealthy suburbs have good ones: financing schools with local property taxes.
Scout211
From the state website:
Apparently not modern and flexible enough for the billionaires. Sad!
Jay
For decades upon decades, Delaware was “THE” State to Incorporate in.
It was known as the “screw you” State, where court rulings and State law would screw over pensioners, employees, customers, victims, States, Cities, landowners, all in favour of Corporations and Shareholders.
Unlike up and coming States like Tex-ass and Nevada, Delaware has not kept up with current trends to deregulate Corporations, and the whole idea that Corporations should not be beholden to Shareholders, or anyone.
Mathguy
Delaware, the Cayman Islands, Cyprus, Isle of Man…more like pirate ports than anything else. “We’ll help you steal all you can!” should be Delaware’s new state slogan.
Fair Economist
A corporation that considers *Delaware* incorporation law too strict is not one you want to be involved with in any way.
Baud
I wish I could change my life by incorporating in another state.
Captain C
@Fair Economist: “Come invest in our company! Just because we’ve made it a point to be able to screw our shareholders doesn’t mean we’ll do it to you. Trust us!”
Jay
@Mathguy:
Isn’t that ruZZia’s National Motto, just under the Coat of Arms?
Why, yes, it is.
мы поможем вам украсть все, что вы сможете
NotMax
Seems quite relevant as to the whole Muskigoths’ sacking and pillaging of the government.
Jay
Because we have a bunch of “olds” here,
Was the fall of Rome this stupid?
Jay
And today, Jackie Robinson has been DEI’d from the DOD website.
bbleh
[insert Godzilla clip]
Let them fight.
Scout211
@Jay: They un-disappeared him. It was a “mistake.”
And by mistake, they mean they got caught.
WaterGirl
@Jay: The baseball player? Racist as fuck.
bbleh
@Jay: [Grandpa Simpson voice] NO, dang it! AND we had a good time! This sucks!
Jay
@Scout211:
“Pull the other one,………….”
Deputinize America
When the revolution comes, the entire Harvard Business School faculty hangs first, followed by every CEO and CFO of every Fortune 500 corporation.
Scout211
@WaterGirl: From my link at #21
Yes, the baseball player, who was also a military vet.
Jay
Seeing as you can’t have eggs, affordable housing, Government jobs, Social Security, Medicare, justice, etc,……………..
The new “American Dream” is watching Musk go bankrupt, broke, and get deported.
Deputinize America
@Jay:
I like how you think. Tell me more…..
Bill Arnold
@Scout211:
There are public archives of the pre-Jan20,2025 US government web pages.
Diffs are straightforward to do for the technically inclined, i.e.. getting caught is close to automatic. Getting a deletion into the news and embarrassing enough to correct is more work.
RepubAnon
Will Tesla be worth $55 billion by the end of 2025? Kind of hard to justify that pay package given Tesla’s current stock price.
JiveTurkin
@RepubAnon: Tesla will be fine with all the government contracts that Musk will get. Including the rural internet contracts that Starlink will get despite the fact they are less reliable than other types of wired internet, and should be used when there are no other options. Tesla will end up with tens of billions in contracts ate inflated prices, and all they will have to do is pay 5-10% to Trump.
WaterGirl
@Bill Arnold:
??
Jay
https://nitter.poast.org/lugaricano/status/1902430027137843596#m
https://nitter.poast.org/shashj/status/1902446261824807412#m
Start searching for a prepaid cheap burner phone.
Jay
@WaterGirl:
Differences, because for now there is an archive of US Gov sites, many searchable, it does not take a great amount of technical skill to search for changes and deletions.
trollhattan
Trump & Co. are taking all the notes. Emperor for Life in a small d democracy? Arrest your nearest rivals, then throttle the means of communications among those who might not like that.
JML
I hope every registered Democrat in WI is getting out and voting early in the state Supreme Court election, because the GOP candidate is a nasty, sleazy POS who tries to hide his willingness to do anything the GOP wants and comfort in taking up extreme positions behind a wall of vanilla blandness. Brad Schimel is a slimeball, who will happily cut anyone’s throat and go along with any dirty trick in order to win an election. Seen it up close and personal, and that shitbag hires nothing but the most soulless right wing white GOP fascists to run his campaigns.
This is a guy who would uphold a ban on interracial marriage, and pretend it bothered him, and claim he’d have no real choice. He pretends to be your nice neighbor who waves politely while manning the grill, but really is secretly calling in code violations on your house and yard. The Banality of Evil. Man, fuck waukesha.
Baud
@JML:
I don’t know. Both sides.
scav
American Greatness must be defined as being the world’s largest and bestest tax haven with no restrictions on corporate personhood but with the largest and bestest army to keep the meatware personhoods under control (both consumer and labor divisions). Expedited Membership available for a cool few mill (but instantly and capriciously revokable for those without platinum-level membership).
WaterGirl
@Jay: Got it, thanks.
Martin
@trollhattan: You can sense that Deputy Asst AG was working hard to not drop an n bomb in that argument.
JML
@Baud: Not in this case. Schimel is a bad fucking guy. eff him forever.
Baud
There are still good people in the world.
Baud
@JML:
🤞
WhatsMyNym
@JiveTurkin:
Tesla doesn’t own Starlink, SpaceX does. SpaceX is NOT a publicly traded company.
prostratedragon
@Scout211: Did these ginks really think no one would notice? We’s liturritt an’ everything now, mars.
NotMax
@Jay
Thought maybe you’d get a chuckle from this question recently heard posed in a lightly comedic watch.
“Québécois. Are they unusually polite Frenchmen or unusually rude Canadians?”
:)
NotMax
@Baud
Ain’t no violin tiny enough.
Jay
@NotMax:
T’is a puzzle for sure, kinda.
Quebecois don’t consider themselves to be French, the French question if Quebecois even speak French, but then many Quebecois don’t consider themselves to be Canadians either.
Schrodinger’s Frenchman?
HopefullyNotcassandra
@Jay: Which fall?
The fall from a republic was epically stupid, driven by jealousy basically. The fall from the empire took a long while but was baked in from the beginning. Rome was a kleptocratic state. It was so corrupt the emperor-ship, itself, was auctioned to the highest bidder.
Our tech bros think they are Caesars. Dipsie doodle ones perhaps, like Nero and Caligula. The Roman Empire chugged along for quite some time by implementing the detailed plans of Julius Caesar. Those plans modernized the Roman port of Ossetia, for example. Those plans also made many Italians Roman citizens, ending the seemingly endless Italian state wars.
Our tech bros have no such plans. They are more like Marcus Crassus, deliberate arsonists for personal gain while having incredibly horrific military minds. Imho
comrade scotts agenda of rage
@Baud:
I believe the proper reaction to that whine is:
Bo Fucking Ho*
*Pronounced ‘who’, not ‘hoe’
comrade scotts agenda of rage
@Deputinize America:
If the faculty at Chicago’s Kenneth C. Griffin Dept of Economics are still teaching the “Chicago School of Economics”, then also include them.
If they aren’t, we’ll use the tumbrels elsewhere cuz there’s plenty of eligible participants starting with Larry Summers.
Jay
@comrade scotts agenda of rage:
Well, given the economic mess coming down the pipeline. it’s good to know that someone with basic woodworking skills or metalworking skills will have new employment opportunities in tumbrel making and guillotine arts. That degree in French Revolutionary History is suddenly looking employable.
Geminid
@trollhattan: The last time an Istanbul mayor got arrested was in 1998, and ironically it was R.T. Erdogan. He read a poem at a rally that prosecutors deemed subversive because of some Islamist imagery. Erdogan ended up serving 4 months of a 10 month jail sentence. He also was barred from public office, but Erdogan’s ban was rescinded in 2003 shortly before he became Prime Minister.
All this is to say that Turkiye has never had the political or civil rights we have here; political prosecutions have been a feature of Turkish politics since the Turkish Republic’s founding in 1923. In this century Erdogan fired 10s of thousands of civil servants and teachers after the failed coup in July of 2016, and many thousands of prisoners convicted over the coup are still in prison.
The former heads of the Kurdish-based HDP party have been in prison for over two years now. They may get out soon if the settlement of the 40-year war between the government and the PKK continues as planned. I’m interested to see what effect these latest arrests will have on that process.
Imamoglu’s CHP party is the original Kemalist party that ran the Republic from 1923 through the Second World War. Since then there have been two military coups and two “Military Memorandums” where the generals told the president to ditch the current Prime Minister or else. The military tried and hanged the Prime Minister it overthrew in 1960 which made everyone take them them seriously thereafter
The last of these “military memorandums” was in 1997 and Erdogan’s prosecution was part of the ensuing crackdown. The generals had Erdogan’s party banned because it’s Prime Minister was too Islamist.
Erdogan and the other party leaders then formed the Justice and Development Party (AKP), which was modeled on Germany’s Christian Democratic Union: conservative but not hostile to Turkiye’s secular Republican model. The AK Party is the largest in the National Assembly, followed by CHP. DEM is the successor to the Kurdish-based HDP and is 3rd or 4th. The other major party is Devlet Bahceli’s ultra-nationalist MHP.
Bahceli is Erdogan’s coalition partner and took the initiative in the peace opening made with Abdullah Ocalan, the PKK’s leader and founder. Ocalan has been in prison since 1999 when Turkish agents kidnapped him in (I think) Nairobi. Ocalan recently published a letter calling for the abandonment of armed struggle and the pursuit of Kurdish rights through the political process.
A lot of if not most Turks assume the U.S. was behind the coups of the post-WWII era.. Turkiye was a key ally of of the U.S. during the Cold War and the Pentagon and CIA gove Turkiye special attention because of its strategic location. Fortunately Turks don’t seem to hold this against Americans, but they are very suspicious of the U.S. government.
Martin
@comrade scotts agenda of rage: Not that long ago it was pretty damn hard to get tenure at a US university if you weren’t a proponent of the Chicago School. I’ve had faculty tell me they can’t even consider a lecture on Marx until they get tenure. Very politicized discipline in academia. The behavioral folks made some decent inroads which softened that mostly by bypassing much of the politically attached stuff, but my sense is that it’s still largely true.
Martin
@Jay: I wish Democrats would better recognize just how proud the French are regarding how they handle an out of control aristocracy. With a bit of leadership we could be that proud too.
SuzieC
Is the Adam Silverman on Jeopardy tonight “our” Adam Silverman?
Jay
@Geminid:
Funny how the Coups and Grey Wolves always trails back to Operation Gladio. We still don’t know WTF was up with shooting Pope John Paul II.
Craig
@Scout211: these people lunatics. Who says things like “a form of Woke cultural Marxism.”? Fucking freaks.
Craig
@Deputinize America: Don’t forget Stanford and Chicago economics.
Old School
@SuzieC: Seems unlikely.
Jay
For those following along:
On the bright side, your Crazy Uncle will now be in the basement for 6 more months, ordering more push pins, red yarn and post-its from Amazon.
Martin
@SuzieC: I suspect Adam keeps a pretty low profile.
Dan B
@Martin: My first year economics at the University of Cincinnati was 50% on Marx.
Baud
@Dan B:
Groucho or Richard?
Jay
@Dan B:
Groucho?
You are old.
Baud
@SuzieC:
“What is, What Da Fuck They Doing Over There?”
Geminid
@Jay: The Turkish version of Operation Gladio was called “Counterguerilla.” When Counterguerilla’s existence was exposed in the 1980s, the Prime Minister said there would be an investigation but there never was. The Turkish “Deep State” network of officers, judges and other elites acting to suppress lefltist and Islamist elements probably grew out of Counterguerrilla.
Jay
@Baud:
Quit copying me in advance.
Jay
@Baud:
Not in “Duck Soup”.
Scout211
I think not.
scav
@Craig: People with a dictionary and bible that regard any degree of sharing as outright socialism. You should see the newly revised parables (?) of the Loaves and the Fishes and the Wedding Catering event at Cana. In both cases, the ROI was fantastic! and the inputs either appropriated or free.
Steve in the ATL
@Jay: eggs were $6 today at Aldi. ALDI!
Steve in the ATL
@JiveTurkin:
It’s tough to out shitty AT&T and comcast. Well done, Elon!
Craig
@Jay: people need to be using the words Tyrant and Tryanny, that’s what’s here.
JiveTurkin
@WhatsMyNym: Did not know that, thank you. But interestingly enough, Musk’s stake in SpaceX is worth more than his stake in Tesla. He owns 42% of SpaceX, currently valued at about $350 billion. With a 5% private equity discount his stake is worth about $140 billion. That’s more than his stake in Tesla by a large amount.
Jay
@Geminid:
The Left/Right terrorism of the late 70’s early 80’s, seems to only stick in my mind for Italy and Turkey. I don’t remember Germany, France, Belgium having Right Wing Terrorists and Left Wing Terrorist whacking each other in public to the point it was a public threat.
tobie
Trump to sign an EO closing the Dept of Education tonight. How great that at a time when critical thinking and quantitative skills are essential, the US is giving up on education. God knows what will happen to special education with this decree.
Jay
@Steve in the ATL:
$2.99 a dozen, large, free range, at Safeway downstairs. I’d ship you some if I knew where the hell you are right now, and off course if the US Border Patrol wasn’t shutting down the whole egg smuggling thing to keep the fentanyl pipeline flowing.
You can’t spell US Border Patrol and Customs with out The Cartel.
The Audacity of Krope
Per the Trump administration; that is Fox News, Doordash, and that big envelope of coupons that comes in the mail every week.
Old School
@Steve in the ATL: Never bought eggs from an Aldi. Do you need to bring your own carton?
mrmoshpotato
@Baud: Famed economist Groucho Marx!
mrmoshpotato
@Old School: Haha, no.
Baud
Craig
@trollhattan: 2nd amendment is going get banned.
tobie
@The Audacity of Krope: Its window dressing, garnish and makes no commitment to anything. All red states will move to vouchers hollowing out public schools. Poor districts will be underserved. And special ed is dead. As the daughter of a public school teacher, I’m devastated.
Steve in the ATL
@Old School: and your own chicken!
Old School
@tobie:
They’re punting on special ed changes at the moment.
From USA Today:
Jay
@Old School:
Mouth makes words
It’s DEIA, the A stands for ability,
Special Ed and supports are toast.
WaterGirl
@Steve in the ATL: They probably had to buy a special pricing gun because their’s didn’t go up that high!
WaterGirl
@Steve in the ATL: @Old School: You guys should take your act on the road. It’s pretty good.
WaterGirl
@Old School:
By why they mean “we are buying time until we can figure out how to stick the states with the full cost, so THEY have to shut the programs down.”
tobie
@Old School: It’s precisely the punting to the states that worries me. I can imagine places like Florida and Texas will try to cajole parents to home school by promising handsome subsidies. Educational quality will plummet, the public sphere will be further eroded and, in keeping with Christianist ideology, women will be taken from the workplace and returned to the home. This is the Project2025 vision. It’s so sickening.
Steve in the ATL
@WaterGirl: first stop is Branson, MO!
Martin
@Old School: Who wants to tell them that special education was probably the biggest policy success of DEI.
Martin
We should have a pool to bet on the first county to resegregate their schools, because I don’t see any mechanisms left to prevent that.
Soprano2
@Scout211: This is the kind of idiocy that happens when you use keyword searches and AI to do stuff.
Jay
@tobie:
Well, your chances of sleeping with the Teacher go way up when you are “home schooled”.
Craig
@trollhattan: 2nd amendment is going get repealed by fiat sometime soon. Billionaires can’t have all these guns pointing at them.
WaterGirl
@Steve in the ATL: If you can time travel, Almost Retired could catch your act when he was there last weekend. :-)
Steve in the ATL
@WaterGirl:
Who told you about that? It’s classified!
ETA: fun fact: the patent office requires working models for patent applications of two things: time machines and perpetual motion machines.
NotMax
@Steve in the ATL
Consult the the library.
Or Spain.
;)
YY_Sima Qian
@Jay: MAGA has been taking lessons from the PRC, except the PRC typically targets foreign critics who are public & prominent in their criticism, especially if they have advocated for sanctions or war against the CPC regime. Even then the CPC regime targets very selectively (plenty of academics who are openly critical are still allowed in for visits & exchanges). MAGA just wants to be the most venal authoritarian possible, never outgrew high school.
Gvg
Home schooling is not a solution. Parents work. Women’s income is required in most families no matter what some overly coddled welloff MAGA men think is possible or ideal, but leaving that aside, it’s a recipe for lots of bored children getting into trouble. There was a rise in juvenile crime during COVID too. If they really did close the schools (not what is proposed) it would be a disaster in several dimensions. And businesses would scream the loudest because it would disrupt their workforce.
When I was younger there were frequent statements in school political arguments that schools weren’t supposed to be babysitters. I think it’s time to recognize that they are in fact doing that for society, besides the educating. Our work culture expects that. It’s a service the government provides and everyone including all businesses should expect to have to pay for it.
coin operated
@Deputinize America: I know how to rig a proper hangman’s knot…just sayin…
sab
@Martin: We (white people) stayed in town specifically because we wanted our kids in an integrated school system. It has worked out well. Our kids are decent people.
I really resent the white flight people trying to statewise impose their assholeness on our local schools. Be assholes out in your exurbs. We want DEI here in town.
I absolutely resent and am beyond furious that my Ohio state tax dollars are paying for rich peoples’ Catholic School education, which is what is happening in Ohio. Cut public school funding and fund private schools. Horrible private schools.
WaterGirl
@Steve in the ATL:
I have probably already said too much already!