Those terms are still being kept under discussion, yet the agreement ends a case that had the potential to fuel a trend of companies leaving the state as their legal home.
Ever since last year, Elon Musk and other business leaders have attacked the state’s courts, once the key reason companies incorporated in Delaware, for ruling that they say made it easier for shareholders to sue directors.
As a response, Musk encouraged companies to leave the state, and in the past year, Dropbox, Trump Media & Technology, Simon Property Group, and Roblox were among the large public companies that reincorporated outside Delaware.
Ann Lipton, a professor at Colorado Law School, "It was going to be really awkward for the court." Meta, which is the owner of Facebook, WhatsApp, and Instagram, and the defenders did not respond to the request for comment.
Meta shareholders alleged that current and former officers and directors of Facebook were liable for failing to protect users’ data. The case put a spotlight on Delaware courts and the judge who was handling the case, Chancellor Kathaleen McCormick, who gained prominence last year for rescinding Musk’s $56 billion pay package from Tesla.
Andreessen Horowitz said earlier this month that “In particular, Delaware courts can at times appear biased against technology startup founders and their boards,” as cited in a blog post on the company’s website, citing McCormick’s Musk pay ruling.
Also worth noting is that Delaware’s political leaders said the changes were meant to keep Meta and other platforms from fleeing the state. Delaware gets even more than a quarter of its budget revenue from businesses associated with chattering.
Despite the law, some companies such as Affirm Holdings still opted to leave, saying that it was not clear how the Delaware court would interpret it, reported Reuters.
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