ANALYSIS: Proposed Texas Legislation Aims to Accelerate DExit

Texas recently upped the ante in its quest to overtake Delaware in state corporate law supremacy. At the end of February, Senate Bill 29, which would codify the business judgment rule and the ability for Texas corporations to adopt an ownership threshold that must be met for shareholder derivative claims, was introduced in the Texas Senate. A companion bill, House Bill 15, was also filed. In bringing these bills forward, Texas lawmakers clearly hope to expedite “DExit,” the reincorporation of companies outside of Delaware.

The bill represents a pro-management shift in Texas corporate law that could entice companies ...