The Continuing Demise of Delaware

Earlier this month, I wrote a commentary called The March Out of Delaware, where I discussed Andressen Horowitz, one of the world's most influential venture capital firms, and its move from Delaware to Nevada, citing the ongoing corporate lawfare in that State.

 

In that same commentary, I cited several other companies which moved from Delaware to friendlier venues, including Tesla, SpaceX, Simon Properties, AMC, MSG, Trump’s TruthSocial and several other big-name companies.

Now, one can add Dilliard's, one of the largest department store chains in the United States, to that group, as it will be moving to Texas. This is a big loss.

Dillard's, which operates about 270 stores in 30 states, employs around 40,000 workers and generates over $7 billion in annual revenue. The company has long been a staple in American retail, offering fashion apparel, cosmetics, and home furnishings.

According to the SEC filing, the company cited "certain high-profile litigation outcomes in Delaware that involved companies with controlling stockholders" as a primary reason for the proposed move.

You would think the State politicians would open their eyes and see what is going on. And finally demand the courts to stop with their anti-corporate behavior. But, apparently, no one has the guts to stand up for business.

Another frequently cited case contributing to Delaware's decline as a corporate center is the $787 million defamation settlement between Dominion Voting Systems and Fox News. Settled in 2023, the Delaware case set a new record in defamation cases.

Fox's then top legal officer, Viet Dihn, sharply criticized the Delaware Superior Court Judge, Eric Davis, for not applying standard defamation law in the case or allowing Fox to engage in appropriate libel defenses.

In a speech to Harvard Law School, Dihn called the court's rullings "illogical" that questioned thet "fairness and integrity" of the Delaware courts.

Even former Harvard Law Professor Alan Dershowitz has urged corporations leave Delaware as their domicile, saying that an entrenched and "cozy" relationship between powerful plaintiff law firms and activist judges in the state have put defendants at a significant disadavantage in any litigation. Lesson learned, class dismissed.

Pretty soon, the First State will find itself know as the Last State, as no business will want to find itself supporting whatever remains of the tax base. And sadly, it will be the fault of the judges and elected politicians.

Note to those judges and the politicos left in the State – you went WOKE, soon you will be BROKE.