For more than a century Delaware has boasted the premier US business court, as legal home to most Fortune 500 companies and the nation’s biggest corporate battles.
Now that status is increasingly being challenged after
Meyer, a Democrat, said in an interview Monday that he is weighing changes to the way business disputes are handled in Delaware. He said the possible changes are based on feedback from executives, corporate lawyers and people suing in the state’s famed
“My role as governor is to look at the system, make sure the corporate law is fair, make sure it’s predictable, make sure it’s clear and consistent, and make sure we’re making whatever changes are necessary” to improve it, Meyer said. “We need to win the future.”
Delaware has long been the preferred paper home for hundreds of thousands of corporations, LLCs and LPs. A major draw for the tiny state is the Court of Chancery. But after decades of dominance, a few executives, led by Musk, have been complaining about the system. And other states are seeking to challenge its status, like Texas, where officials
The highest-profile exit so far has been Musk’s. His move out of Delaware came after the court’s chief judge, Chancellor
Read More:
Musk used his social media platform, X, to go after McCormick, the court and the state for not honoring the will of Tesla shareholders, who voted twice to approve his compensation award — the biggest ever. He urged other executives to move their companies as well, to states such as Texas and Nevada, where he said the laws were more amenable to management.
A representative for McCormick declined to comment.
Meta is
Delaware has spawned “less meritorious and costly litigation and has the potential to cause unnecessary distraction to the company’s directors and management team,” Dropbox added.
Meanwhile, Ackman said on X Saturday that Pershing Square was reincorporating its management company in Nevada, adding in another post that the firm hadn’t yet made a final decision and was also considering Texas.
A Pershing Square representative had no comment on the posts.
And on Tuesday the Delaware Supreme Court
Delaware’s chancery judges are recognized as business law experts who hear cases quickly and efficiently without a jury. But Meyer said he has heard from critics that they didn’t always have a chance to appeal rulings against them at the trial level before they become final. The complaints weren’t limited to any one judge, he said. He declined to say whether he has had direct discussions with Musk.
Meyer said some companies don’t like the Chancery Court system in which subsequent cases involving a given litigant tend to be assigned to the same judge for efficiency, and judges are appointed by the governor rather than elected by voters.
“They know in some cases the judge has ruled against them in the past, and so they feel like the result of the case is a foregone conclusion,” the governor said. Musk has complained about McCormick, who is presiding over other cases involving him.
Depending on the changes he proposes, McCormick could choose to implement them, or the governor could push for legislation to enact them.
Chancery Court has always had its critics, but none quite like Musk, according to corporate governance expert Larry Cunningham.
“People have lost cases in Delaware, and they’ve grumbled and criticized and maybe even told their lawyers not to recommend Delaware” to others as a corporate home, said Cunningham, director of the University of Delaware’s John L. Weinberg Center for Corporate Governance. “But this is a different world, and he’s a much more influential person.”
Meyer said Delaware still has a commanding lead as corporate home to American big business, and that 81% of the US companies that launched initial public offerings last year incorporated in the First State.
Despite its small size, Delaware is corporate home to more than 2 million businesses and more than 60% of Fortune 500 companies. Incorporation fees generated more than $2 billion for the state in 2022, or about a fourth of its annual budget.
Meyer, a lawyer himself, worked at
(Adds new Delaware Supreme Court decision below Ackman photo, how governor could make Chancery changes above McCormick photo and expert analysis below it.)
--With assistance from
To contact the reporters on this story:
To contact the editors responsible for this story:
Peter Jeffrey, Peter Blumberg
© 2025 Bloomberg L.P. All rights reserved. Used with permission.
Learn more about Bloomberg Law or Log In to keep reading:
Learn About Bloomberg Law
AI-powered legal analytics, workflow tools and premium legal & business news.
Already a subscriber?
Log in to keep reading or access research tools.