Realty Firm eXp Plans DExit After Landmark ‘Rape Culture’ Ruling

eXp World Holdings Inc. is looking to leave Delaware weeks after a landmark court ruling there let litigation proceed over the real estate firm’s pervasive “rape culture.”

Founder Glenn Sanford said in a securities filing Wednesday that he’s planning to move eXp to Texas, which has emerged as a top “DExit” destination for companies spurning the longtime US corporate capital. Texas is promoting its new business court and free market reputation to lure companies—especially founder-led or venture-backed firms—that are wary of litigation risks in Delaware.

Sanford’s disclosure Wednesday came six weeks after the chief judge of Delaware’s Chancery Court ordered him to face claims he actively covered up rapes and sexual assaults committed by two superstar agents because the company’s pyramid-style pay structure placed the alleged perpetrators in his revenue downline.

“We believe Texas offers a governance environment that is clearer, more predictable, and better suited to a company of our size and complexity,” he wrote in the securities filing.

Nevada, where a specialized business court is now in the works, is also making a major play for corporate charters. Although Delaware still leads by miles—the state is home to nearly 70% of Fortune 500 firms—its governor and lawmakers were rattled enough last year by attacks from Elon Musk and saber-rattling from other tech companies to lower the legal guardrails around self-dealing and other abuses of corporate control.

Some of the highest-profile companies to announce they’re departing Delaware or seriously considering it, including Coinbase Global Inc. and Meta Platforms Inc., are actively involved in the types of shareholder cases that Texas and Nevada make it far harder to bring.

Delaware’s top court ruled last year that businesses can freely relocate on any “clear day.” Although eXp is leaving under a cloud, the company said Wednesday it would seek approval from public investors, a decision that would reduce legal scrutiny by asking shareholders to sign off on corporate conflicts of interest.

Last month’s setback for Sanford reflected the widening fallout of accusations made in civil lawsuits against David Golden and Michael Bjorkman, two real estate “influencers” who allegedly drugged women at boozy recruiting events, assaulted them in hotel rooms, and blackmailed them into joining eXp. The company—known for a work-hard, play-hard culture that revolves around “alpha agents”—has been hit with a string of civil suits asserting related sex-trafficking claims.

The Jan. 16 ruling also let lack-of-oversight counts move forward against other eXp board members who allegedly turned a blind eye to the assaults even after a whistleblower emerged. It revealed an unusually direct break between Chancellor Kathaleen St. J. McCormick and one of her colleagues, who rejected similar claims against Credit Glory Inc. executives a few weeks earlier.

The court’s seven specialist judges typically bend over backward to avoid letting their disagreements spill into public view, often stressing fine distinctions between the scenarios confronting them. But McCormick pushed back directly in her 90-page eXp decision, saying “the appellate process” would resolve the difference of opinion. The issue has already reached the state supreme court.