Chancery Court bill becomes law

About two hours after the House overwhelmingly passed a bill strengthening decision-making by a corporate board and majority shareholders, Gov. Matt Meyer signed it into law.

“Delaware is the best place in the world to incorporate your business, and Senate Bill 21 will help keep it that way, ensuring clarity and predictability, balancing the interests of stockholders and corporate boards,” said Meyer in a press release. 

Meyer thanked legislators for their bipartisan support of the bill that was the result of a number of big-name corporations leaving the state following a 2024 decision by Chancellor Kathaleen McCormick who ruled in favor of a shareholder with nine Tesla shares over two shareholder votes that had been approved for a $56 billion compensation package for Elon Musk.

SB 21 had no problem getting the two-thirds support needed to pass from both houses of the General Assembly.

It passed the House March 25 with 32 votes. Seven voted against and two were absent. Rep. Stell Parker Selby, D-Milton, was absent; Rep. Claire Snyder-Hall, D-Rehoboth Beach, and Rep. Valerie Jones Giltner, R-Georgetown, both voted for the bill. Five amendments put forth by three Democrats all failed.

On March 13, the Senate passed the bill – co-sponsored by Sen. Russ Huxtable, D-Lewes, along with Sen. Brian Pettyjohn, R-Georgetown – with 20 votes and one absent after weeks of drafting the bill with corporate attorneys.

A sense of urgency surrounded the bill as more corporations besides Musk’s Tesla and SpaceX left the state, leaving officials concerned over the $2 billion in corporate funds that Delaware could lose.

Dropbox and TripAdvisor have left, and reports suggest Meta and Walmart could be next. Owner of the Dover Mall, Simon Property Group, recently had an affirmative board vote to move its corporation to Indiana. 

Before the March 25 House vote, bill sponsor Rep. Krista Griffiths, D-Fairfax, said something has to be done to protect Delaware’s economy and the people in the state.

“When I passed the Delaware Bar, there were not one but two major auto manufacturing plants in this state providing high-paying union jobs,” she said, adding banking giant MBNA and chemical company DuPont were also once big corporate players in the state. “Today, all of that is gone, all of it, and it is never coming back. That shows how quickly economic opportunity can be lost. What seems permanent can easily vanish.”

Griffiths said the bill, now law, is necessary to prevent other corporations from fleeing the state – a price that could add up to about a third of the state’s budget. She pushed back on the “billionaire bill” moniker opponents have assigned the bill.

“Opponents of this bill have criticized me and other supporters for doing the quote-unquote bidding of billionaires,” she said. “My neighbors in Fairfax will get a chuckle out of that. I can assure you there are no billionaires in my neighborhood. What I have in my neighborhood are people feeling pressure from ever higher costs, who want to make sure there is money for our schools, our hospitals, our police, our seniors and our roads.”