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DE

They are putting up the walls to allow corporate America to screw the investors!

https://www.delawareonline.com/story/news/2025/03/25/delaware-corporate-law-changes-chancery-court-signed-into-law-by-governor-matt-meyer/82655315007/

Controversial corporate law changes passed by House, signed by Delaware governor

Xerxes Wilson

Delaware News Journal

10:29 PM March 25, 2025

The Delaware House of Representatives on Tuesday night overwhelmingly passed a controversial rework of the state’s corporate code.

Delaware’s corporate laws govern the management of most of the nation’s top corporations, and the amendments passed by the legislature Tuesday will make it harder for shareholders to sue companies' most powerful leaders for self-dealing and transactions that include conflicts of interest.

The overhaul has been the most controversial initiative in this year’s General Assembly, seeing debate from national media headlines to mail sent to everyday Delawareans.

The bill has been championed by new Gov. Matt Meyer as well as Democratic leaders in the General Assembly. They say the changes are a necessary course correction that will give corporations' most powerful managers more predictability and consistency as they consider business transactions.

To justify the change, proponents have argued that the future of Delaware is at stake, forecasting an exodus of business activity that underpins the state's relatively low taxes, lack of sales tax and funds more than a quarter of state government annual expenses.

Meyer swiftly signed the bill after its House passage Tuesday night, saying in a press release the initiative would "protect state revenue" that funds all aspects of local government.

Critics, which include corporate law academics, institutional investors and attorneys that represent shareholders, contend that doomsday prophecies about an exodus of companies and corresponding loss of state revenue are a mirage created to justify what one attorney described as a “nakedly corrupt hand-out to billionaires.”

They argued the changes would handcuff the ability of Delaware's famous Chancery Court to police deals involving conflicts of interest, ultimately giving influential business leaders greater leverage to benefit themselves at the expense of pensioners, retirees and ordinary investors.

In sum, this will detract from Delaware's status as the premier place to charter a business and lead businesses away from Delaware, critics argued.

"I think it risks the future of the franchise. It risks federal intervention," said Democratic state Rep. Madinah Wilson-Anton. "That would be, in fact, cooking that golden goose."

The House hearing capped a month of debate that resembled national debates over the power and influence individual business leaders and billionaires have over the mechanics of government.

During Tuesday's hearing, opponents unsuccessfully introduced several amendments aimed at bolstering protections for investors, as well as preventing the bill from undercutting ongoing shareholder investigations into potential past misdeeds by powerful individuals at companies like Meta ? Facebook and Instagram's parent company.

What the bill does:

Delaware is the legal home to some 2 million corporations, about 60% of those in the Fortune 500. The corporate laws on the state’s books govern the rules by which the nation's largest corporations govern themselves.

When shareholders feel they've been taken advantage of by powerful people within companies, they take those claims to the Delaware Chancery Court, which serves as a check on mismanagement. Its speed, consistency and judicial expertise in evaluating such claims is said to be one reason Delaware is the primary place to charter a business.

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The law passed Tuesday deals specifically with how Chancery Court can police deals cut by a company's most powerful shareholders, like Mark Zuckerberg of Meta, when there is a conflict of interest. These individuals are referred to in the law as "controlling stockholder" or "director."

The changes amend how a controlling stockholder is defined, lower the hurdles they must jump through to execute a potentially conflicted transaction, and curtail information available in so-called "books and records" requests. These requests are used by aggrieved shareholders to obtain documents, files, meeting minutes and communications to investigate their claims.

Attorneys involved in drafting the legislation say that over the years, the legal definitions of controlling stockholders, what books and records are, and other concepts affected by the legislation have been expanded by Chancery Court rulings. This has caused uncertainty when business managers are evaluating potential company transactions.

The sentiment is that Delaware feels “less predictable, less stable, less business friendly” and that there is a “much more litigious environment," said Amy L. Simmerman, partner at Delaware firm Wilson Sonsini and advocate of the bill, at a House committee hearing last week.

This has caused more companies she counsels to question their future in Delaware, she said.

So the purpose of this legislation is to provide more predictability and balance where recent court decisions have caused confusion, said Lawrence Hamermesh, a corporate law expert who helped draft the bill.

But opponents have argued the legislation will reduce the role of Chancery Court policing bad transactions, overturn decades of court precedent and allow controlling shareholders greater leverage to engage in conflicted company transactions at the expense of other shareholders.

It will also further the idea that powerful business people can simply turn to a pliable state legislature for relief when they don't agree with a Chancery Court decision, opponents said.

Amendments fail on House floor

Multiple amendments debated on the House floor Tuesday were aimed at preserving aspects of Delaware case law that Wilson-Anton, author of those amendments, argued would continue to provide protections for investors.

"We are dealing in dangerous territory," Wilson-Anton said.

Each failed after they were labeled as "unfriendly" by the bill's House sponsor.

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Another amendment would have made the proposed changes apply only if individual companies' shareholders voted to adopt the changes.

Democratic state Rep. Sophie Phillips, the amendment’s sponsor, told legislators the bill has generated a “bad look for our state” and that the amendment would reflect a “compromise.”

Robert Jackson, a law professor at New York University and former commissioner of the U.S. Securities and Exchange Commission, was called as a witness by Phillips.

He argued that without amendment, the bill changes law that has worked well for many Delaware-chartered companies for decades. An opt-in provision would give companies the flexibility to tailor the law to their needs or not, a hallmark of other aspects of the state's corporate code, he said.

Democratic state Rep. Krista Griffith, the bill’s sponsor in the House, argued the amendment would impose a “tremendous amount of work” for companies to opt into the new rules, nullifying the purpose of the bill. Jackson countered that opting into the rules would carry the same process as reincorporating outside of Delaware and without the downsides that come with such a move.

Jackson's testimony was ultimately cut off by House Speaker Melissa Minor-Brown, who accused him of speaking too much about the bill itself and not the amendment, which ultimately failed.

Questions over motive for corporate law changes

Another amendment was aimed at criticisms thrown at the General Assembly about motive.

Absent data showing any exodus of Delaware companies is afoot, opponents have argued the changes are actually at the behest of a few powerful business leaders like Zuckerberg at Meta.

In February, news leaked to the Wall Street Journal that Meta was reincorporating outside of Delaware. Shortly after, tech company Dropbox and Pershing Square Capital Management, an investment firm, made similar rumblings.

Secretary of State Charuni Patibanda-Sanchez has said these rumblings began the conversation that led to the legislation.

Public records first reported by CNBC showed a Saturday meeting organized by the Meyer administration with state legislators and corporate attorneys the day after the Meta leak was published and then a meeting with Meyer and Meta officials organized for the following day.

Over the subsequent weeks, the bill was drafted by Hamermesh, as well as an attorney at Richards, Layton & Finger, in addition to former Chief Justice of the Delaware Supreme Court Leo Strine Jr. and former Court of Chancery Chancellor William Chandler III, both of whom now work for firms that typically defend against shareholder lawsuits.

On the House floor Thursday, Rep. Frank Burns, a Democrat, noted he was aware of two pending shareholder investigations into Meta that could become lawsuits that could be undercut by the changes.

The change passed by legislators Tuesday would apply to any previous company transactions that are not subject to any lawsuit or court ruling as of February, potentially undercutting any lawsuit that flows from a current investigation into past transactions.

"The last thing that Delaware should have is the impression that by passing this law, we intervened in some way that may have benefited some company," Burns said, presenting an amendment that would make the new rules only apply to transactions occurring after the bill's passage.

Griffith, the bill's House sponsor, also described this amendment as "unfriendly" and argued it would cause confusion and go against the point of the bill: to make things "clearer for corporations."

Burns replied that it would be less confusing and more fair to have past transactions governed by the law in effect at the time and future transactions governed by the new law.

This would be more "honorable and clean," and "takes us out of being accused of having done something that would intervene in some ongoing investigation," he said.

That amendment also failed.

Contact Xerxes Wilson at (302) 324-2787 or xwilson@delawareonline.com.

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They know what is coming and it cannot be stopped!

https://www.delawareonline.com/story/news/politics/2025/03/21/delaware-death-penalty-state-constitution/82520026007/

Lawmakers renew efforts to strip Delaware death penalty from constitution. Here's why

Xerxes Wilson

Delaware News Journal

4:41 AM March 21, 2025

Delaware lawmakers are once again being asked to make the death penalty a thing of the past, even though no one has been executed in the First State for more than a decade.

For the second consecutive year, a bill seeking to remove the death penalty from Delaware’s constitution is up for debate in the General Assembly. The year's effort, House Bill 35, passed out of committee Wednesday and is pending a full vote of the Delaware House.

The state has no person on death row, and the penalty is no longer part of Delaware’s criminal statutes. But it remains sanctioned in Delaware's constitution.

The state’s death penalty statute was ruled unconstitutional after a 2016 U.S. Supreme Court ruling that invalidated the way states like Delaware sentenced people to death. And General Assembly Democrats, excluding Wilmington Sen. Darius Brown, voted to remove the penalty from its criminal statutes last year.

But fixing the legal defect identified by the Supreme Court and reinstating the penalty would take nothing more than a simple majority vote and governor approval ? something that has happened multiple times in Delaware's history.

And so abolitionists have long sought to strike the penalty from Delaware’s constitution, which outlines the state’s fundamental legal principles, to make it more difficult for future lawmakers to resume state-sanctioned executions.

Amendments to the state's constitution must be passed over two years and require more affirmative votes by lawmakers. Simple changes to the criminal code require only a majority vote in both chambers in one year before moving on to the governor’s signature.

Trump administration adds urgency:

For abolitionists nationwide, the ongoing fight against the death penalty has been given new urgency under the Trump administration.

In just three months in office, Trump has pushed the law and gone beyond its bounds for his far-right, mass-deportation and government-gutting agenda. And as it relates to the death penalty, his administration quickly signaled a renewed thirst to ramp up government executions.

Trump signed an executive order on his inauguration day titled “Restoring the Death Penalty and Protecting Public Safety Executive Order.”

Among directives specifically aimed at federal law enforcement, like demanding federal prosecutors seek the death penalty specifically for capital crimes committed by undocumented immigrants, the document also orders the federal government to “take all appropriate action to seek the overruling of Supreme Court precedents that limit the authority of state and federal governments to impose capital punishment.”

It's unclear precisely what that might mean on the state level, but in Wednesday's committee hearings, advocates for abolition mentioned happenings in other states as reasons to finally strike the penalty from Delaware's constitution.

During the committee hearing, Kevin O'Connell, chief defender of the Office of Defense Services, said those that seek to reinstate the death penalty elsewhere have been "emboldened by what they are hearing from Washington."

In Delaware, local Republicans have already shown appetite for reinstating the penalty before Trump’s return to office. GOP lawmakers in Delaware as recently as two years ago introduced legislation to revive the penalty and have other times in recent years.

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Those proposals were sometimes geared around crimes against law enforcement like the 2017 uprising at James T. Vaughn Correctional Center that saw a correctional officer murdered, as well as the killing of state police Cpl. Stephen J. Ballard that same year.

Sometimes, those efforts picked up Democrat lawmakers in support. And, last year, Republicans in the Delaware House of Representatives successfully blocked a constitutional amendment seeking to strike the penalty from Delaware’s constitution.

The debate over the death penalty:

There are 27 states that, along with the federal government and U.S. military, maintain the legal authority to kill people as a punishment, according to the nonprofit Death Penalty Information Center. Delaware last executed a person in 2012 when 28-year-old Shannon Johnson was killed by lethal injection.

Death penalty cases in Delaware were put on hold in 2016 after the U.S. Supreme Court struck down provisions in Florida's capital punishment rules ? laws that were similar to those in Delaware. The ruling focused on the interaction of judge and jury in the process of sentencing someone to death, not the death penalty more generally.

Shortly after, Delaware's Supreme Court issued a similar opinion regarding Delaware's law, eventually leading to those awaiting death being resentenced to life in prison and the end of the penalty in Delaware to this point.

But the idea that the Legislature could simply fix legal process defects identified by the U.S. Supreme Court within the state’s death penalty system in order to continue killing people is not hypothetical. It is the death penalty’s history in Delaware.

Since 1958, Delaware's death penalty has been abolished by lawmakers or legally invalidated by the courts only to be reinstated by legislators often highlighting the latest heinous crime to grip the public's attention. This two-step has seen Delaware execute several people under legal processes later deemed unconstitutional.

"It is time to end the cycle. There is no constitutional way to execute people," said state Rep. Sean Lynn, a Democrat from Dover who is the bill's primary sponsor. "It’s time we ban this."

Debates over its place in society typically hinge on crime deterrence and the ideals of justice.

Supporters of abolition cite data that shows the death penalty is not an effective crime deterrent. Historically, it has also been a tool of institutionalized racism with the penalty far more likely to be applied to Black people. The penalty is generally unpopular with the general public and highly imperfect: The government has executed many individuals who were later proven innocent.

And from a justice perspective, it does not offer restoration for the families of someone who has been killed. This, while also victimizing the families or loved ones of the person the penalty is inflicted upon.

Supporters of the penalty in the Delaware General Assembly last year recounted famous and heinous murders, the murder of a police officer and the pain felt by victims of violent killings as reasons to bring back the punishment. State Sen. Dave Lawson, a Republican representing Marydel, referred to some people who carried out such famous murders as "animals."

GOP lawmakers have also argued that the penalty can be applied in a way that removes the possibility that innocent people are killed by the state ? despite the fact that the modern criminal justice system regularly proves itself to be flawed.

If approved by the Senate, House and governor this year, the proposed constitutional amendment must again be approved next year for it to become law.

Contact Xerxes Wilson at (302) 324-2787 or xwilson@delawareonline.com.

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