As someone who coedited Can Delaware Be Dethroned?: Evaluating Delaware's Dominance of Corporate Law, I have been following with interest recent developments that suggest some slight slippage in Delaware's dominance. So has Keith Paul Bishop. Keith reminds us that VC Laster declined to enjoin TripAdvisor's reincorporation in Nevada, although liability claims remain pending, and informs us that Laird Superfood, Inc., has done likewise.
One of the reasons Laird invoked in its proxy statement to justify the move was a claim that "Nevada is more advantageous than Delaware because Nevada has pursued a statute-focused approach that does not depend upon judicial interpretation, supplementation and revision, and is intended to be stable, predictable and more efficient, whereas much of Delaware corporate law still consists of judicial decisions that migrate and develop over time."
Older readers will recall a debate a few years ago about the extent to which Delaware corporate law is indeterminate and whether any such indeterminacy works to Delaware's advantage or disadvantage. Whether or not indeterminacy helps maintain Delaware's dominance, Keith thinks Delaware law's indeterminacy imposes important costs on its users:
One of my primary complaints about Delaware jurisprudence has been that you can read the Delaware General Corporation Law cover to cover and still know very little about Delaware corporate law. Many extremely important doctrines and standards are the product of case-law and subject to continuous refinement by the Delaware courts. You will not find "entire fairness", "Caremark duty" or "Revlon duty" in the Delaware General Corporation Law. While Delaware's judge-made corporate law does evidence a high degree of legal sophistication, it also imposes significant costs on corporations due to the inherent uncertainty engendered by the ever evolving nature of Delaware jurisprudence. It also encourages litigants to test new theories of liability.
It's a debate that may reward being revisited.
