ANALYSIS: Dropbox Lawsuit Forces Chancery Court Reckoning

It took less than two weeks after Delaware enacted its game-changing legislation amending the state’s corporate laws for a party to challenge it.

Dropbox, Inc.‘s shareholder pension fund filed the first lawsuit targeting Senate Bill 21 on April 3. In its suit against the company, the fund alleges that because the Court of Chancery has sole jurisdiction to hear equitable claims, the amendments improperly seek to usurp judicial authority by legislative fiat.

This suit and possibly others that follow a similar script will force the Delaware judiciary into a highly unusual position: Judges may have to decide the extent ...