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Delaware Supreme Court on Tripadvisor Inc.’s Decision to Go to Vegas: Sacrificing One to Save More?

Vincenzo Antonelli
University of Chicago Law School LL.M ’25.
TABLE OF CONTENTS

I. Introduction

Delaware has traditionally been the dominant state for U.S. corporations.1 However, starting in early 2024, that dominance began to show signs of erosion. Specifically in the wake of the high-profile Chancery Court decision invaliding Musk’s compensation package,2 Delaware’s dominance has been called into question.3 Critics argued that Delaware courts developed a negative attitude toward directors and management and controlling shareholders, failing to recognize their value-added contributions and becoming overly friendly to plaintiff shareholders.4 At the same time, rival states began intensifying efforts to usurp Delaware’s crown by making themselves more attractive for businesses, prompting companies to consider leaving Delaware—a phenomenon commonly referred to as “DExit.”5 Among these states, Nevada is one of Delaware’s biggest competitors.6

In such a context, the Delaware Supreme Court recently ruled on Tripadvisor Inc.’s decision to change its corporate domicile from Delaware to Nevada.7 In Maffei, the Delaware Supreme Court reversed the Court of Chancery’s opinion and held that the directors’ decision to reincorporate should be reviewed under the business judgment rule, rejecting the entire fairness test.8 This ruling effectively eased DExit.9

This paper proceeds as follows. Section II briefly outlines the standards of review under Delaware corporate law, focusing on the key distinctions between business judgment and entire fairness, particularly in the context of controlling shareholder transactions, and lays down the facts of Maffei. Section III focuses on this decision and compares it to (i) Tornetta and (ii) Sinclair,10 with respect to the blurry category of “conflicted controlling transactions” and the applicable standard of review. Also, it argues that—despite the more immediate result of losing Tripadvisor to Nevada—there may be a retention strategy behind Maffey to counter DExit. Finally, it discusses the impact of the very recent Delaware General Corporation Law (“DGCL”) changes, signed into law on March 26, 2025, which have reshaped the rules dramatically.11 Section IV concludes that, in an already complex context, Maffei may have been a nuanced attempt by the Delaware Supreme Court to subtly reassure corporations and counter DExit trend, shortly after overturned by the Delaware General Assembly (“DGA”) with the enhancement of the SB 21 which represents a more direct intervention aimed at preserving Delaware’s dominance.

II. Background

Under Delaware corporate law, business transactions are subject to three standards of review: (i) business judgment, (ii) enhanced scrutiny, and (iii) entire fairness.12 Because the “enhanced scrutiny” is tailored to mergers & acquisitions contexts,13 as it was developed in the iconic Unocal litigation,14 it is not addressed here. 

A. Business Judgment vs. Entire Fairness in controlling transactions

In general, the relationship between business judgment and entire fairness is resolved by a shift in the burden of proof. The fundamental principle is that, in the absence of fraud, illegality, or self-dealing, Delaware courts would not interfere with the honest business judgment of directors, which is thus presumed.15 The burden lies with the party challenging a corporate fiduciary’s decision to rebut this presumption.16 Excluding cases of fraud and illegality which fall outside the scope of strict corporate law—and therefore are not considered here—plaintiffs meet this burden by presenting evidence that supports a credible allegation of a breach of the duty of loyalty or care.17 If they do not succeed, the merits of the contested decision will not be reviewed by the court.18 Therefore, the business judgment rule “is not, functionally speaking, a standard of review at all,”19 rather “it is an expression of a policy of non-review.”20 Contrarily, if the plaintiffs rebut the business judgment presumption, the burden of proof shifts to the defendants to meet the entire fairness standard. In other words, “the entire fairness standard applies only if the presumption of the business judgment rule is defeated.”21 Such a standard has two components: (i) fair dealing (or process) and (ii) fair price.22 In corporate governance, fiduciary duties tie directors and officers while shareholders substantially have carte blanche.23 This is true until that shareholder becomes a controller, as Delaware “charges controlling stockholders with fiduciary responsibilities.”24 Not yet considering SB 21, to be a controller the shareholder either (i) owns more than 50% of a corporation’s voting power,25 or (ii) “as a practical matter, possesses a combination of stock voting power and managerial authority that enables him to control the corporation, if he so wishes,”26 or (iii) “dominate[s] a particular transaction or decision.”27 For purposes of this paper, the crux of the matter is to determine what triggers the entire fairness standard in the context of a “controlled transaction,” which is a transaction involving controlling shareholders. However, the mere fact that entire fairness applies is not determinative as the law allows cleansing “via approvals by disinterested and independent directors and/or shareholders.”28 The cleansing effects changes depending on the cleansing device and—at least until In re Match—29on the relevant transaction. Such effects include both a mere shift back to the plaintiff to prove that the transaction was unfair and the change of standard of review to business judgment.30

B. Maffei’s facts

Directors, officers, and stockholders of Tripadvisor and Liberty TripAdvisor Holdings have decided to change their corporate domiciles from Delaware to Nevada.31 However, not all stockholders supported this decision. Dissident stockholders (plaintiffs) brought an action against the CEO and chairman of the corporations that held the majority of voting power in the subject companies, as well as members of the corporations’ boards of directors (defendants), challenging the decision to relocate to Nevada.32 Plaintiffs argued that the transactions would provide non-ratable benefits in the form of reduced liability exposure for the defendants, who are effectively the controllers of the companies.33 Accordingly, the plaintiffs contend that the conversions should be reviewed under the entire fairness standard.34 Defendants vigorously dispute this contention, arguing that they will not receive a non-ratable benefit and thus that the business judgment rule applies.35 On February 20, 2024, the Chancery Court denied defendants’ motion to dismiss and held that the plaintiffs adequately alleged that the defendants would receive a non-ratable benefit in the form of reduced liability exposure, and that the complaint alleged facts supporting a reasonable inference that the conversions were not entirely fair.36 Afterwards, defendants requested the Delaware Supreme Court to certify for interlocutory review of the Chancery Court’s decision. On February 4, 2025, the Delaware Supreme Court issued a 64-page holding, reversing the judgment by asserting that the Court of Chancery erred in determining that the plaintiffs had alleged facts supporting a reasonable inference that the transactions were subject to entire fairness review.37 Instead, the Delaware Supreme Court held that the business judgment rule applies.

III. Analysis: When Does a Controller Transaction Trigger the Entire Fairness Test?

A. From Sinclair to Tornetta to Maffei

Sinclair was historically the seminal case governing controller transactions.38 In this case, the Delaware Supreme Court held that, even if “a parent does . . . owe a fiduciary duty to its subsidiary when there are parent-subsidiary dealings . . . this alone will not evoke the [entire] fairness standard” (emphasis added).39 Instead, it would apply when “the parent, by virtue of its domination of the subsidiary, causes the subsidiary to act in such a way that the parent receives something from the subsidiary to the exclusion of, and detriment to, the minority stockholders of the subsidiary” (emphasis added).40 This test treats the economic effect of the transaction (i.e., the exclusion of and detriment to the minority stockholders) and the presence of a controlling shareholder as inextricably linked. As such, the mere occurrence of a transaction involving the corporation and its controlling shareholder—even if caused by that shareholder or she is a party to it—is not, in itself, sufficient to rebut the business judgment presumption. In Sinclair, the Court held that the dividend declaration of Sinclair Venezuelan Oil Company (one of Sinclair’s subsidiaries) caused by Sinclair was not subject to the entire fairness test because the controlling shareholder “received nothing from [the company] to the exclusion of its minority stockholders.”41

After Sinclair, different lines of cases regulating controlling shareholder transactions emerged.42 Some courts applied the entire fairness standard simply because the “parent corporation stood on both sides of the transaction and have dictated its terms,”43 which would exclude any threshold inquiry.44 Other courts required the transaction to be to the exclusion of the minority shareholders, ignoring the detriment prong.45 In any event, even if Delaware courts “have essentially abandoned the Sinclair . . . threshold inquiry . . . it still appears to be the case that fairness review ‘is not triggered solely because a company has a controlling stockholder.’”46

Then, starting from the seminal case Lynch,47 courts identified certain transactions, such as freeze-out mergers, to be “inherently coercive”48 and thus required the entire fairness standard regardless of approval by a special committee of disinterested directors or by an informed majority of the minority shareholder vote.49 In such contexts, “the unchanging nature of the underlying “interested” transaction requires careful scrutiny.”50 Thus, the standard of review does not change, but simply shifts to plaintiffs.51 Instead, to lower the standard of review to that of the business judgment rule, the merger must go through both the cleansing devices (so-called “MFW framework”).52 At first, the inherent coercion justification was linked to the nature of transaction.53 Over time, such a concern “moved upstream from the standard of review into the definition of control itself.”54 Delaware courts started to justify entire fairness review “in the freezeout setting not only on conflicted interest grounds, but also because squeeze-out transactions are inherently coercive.”55 But such a justification “for invoking entire fairness cannot be constrained to freezeout transactions. Instead, it potentially justifies automatically applying entire fairness to all controller transactions.”56 In other words, the perils that the entire fairness is meant to avoid seem to be no longer related to the transactions themselves, but rather, to players involved—the focus has shifted from coercive transactions to coercive controlling shareholders.57

The Chancery Court’s decision in Tornetta seems to be consistent with this approach as it applied such a new version of the inherent coercion theory to a compensation package, also confirming the distance to Sinclair.58 In Tornetta, the Court determined whether Tesla’s CEO and shareholder, Elon Musk, and the company’s other directors breached their fiduciary duties by awarding Musk his compensation package as CEO. To determine the appropriate standard of review, the Court exclusively focused on deciding whether Musk exercised sufficient control over the compensation package so that, at least in relation to such a transaction, he could be deemed as Tesla’s controlling shareholder. It did not explicitly address what counts as a conflicted transaction. Instead, it blended the analysis of the controlling status with that of conflicts of interest, relying heavily on Musk’s role as a “superstar CEO”59 (and very little on his role as a shareholder) to explain his control of the company and the board’s inability to make independent decisions.60 Indeed, after a long and complex legal analysis, the Court concluded that “entire fairness [was] the standard of review”61 because “Musk exercised transaction-specific control over the Grant”62 (emphasis added). The burden of proof thus shifted to the defendant, who failed both to shift it back to the plaintiffs and to meet the entire fairness of the transaction. Consequently, the Court rescinded Musk’s compensation package. The Court’s adoption of the new inherent coercion theory is also evident in the later part of the opinion discussing the cleansing procedure. Here the Court expressly followed Lynch’s argument that if one of the cleansing devices had been applied to the transaction,63 the burden would have shifted only to the plaintiffs, thus excluding any restoration of the business judgment rule. In doing so, the Court treated the compensation package as a freeze-out merger in terms of the coercion employed by the controlling shareholder. The Chancery Court’s line of reasoning is consistent with that of another landmark case, In re Match, which was decided by the Delaware Supreme Court on April 4, 2024, just a few months after Tornetta. In In re Match, the Supreme Court openly extended the inherent coercion justification to all controller transactions by holding that “[i]f the controlling stockholder wants to secure the benefits of business judgment review, it must follow all MFW’s requirements.”64

As well known, the decision ultimately led to Tesla’s move to Texas and Musk’s public support of DExit on his X account (formerly Twitter) by saying, “[n]ever incorporate your company in the state of Delaware.”65 Aside from Musk’s immediate reaction after losing the lawsuit, the decision and rationale behind Tornetta are significant. As anticipated above, it marks the risk any controlled transactions—even those not requiring a statutory vote by shareholders and that, quoting Chancellor Kathaleen McCormick, who issued Tornetta, are the “quintessential business determination subject to great judicial deference”—66may be subject to entire fairness review.67 

In Maffei, the Delaware Supreme Court seemingly attempted to limit such a new trend. The facts that Maffei was a controlling shareholder of the company—which was undisputed and all parties agreed was true—68and that the reincorporation was a controlled transaction were not themselves enough to trigger the entire fairness test.69 The Delaware Supreme Court reversed the judgment of the Chancery Court to apply entire fairness, arguing that the decision to redomicile from Delaware to Nevada did not grant Maffei a material, non-ratable benefit and, therefore, that the business judgment rule applies.70 

The ruling focuses on the definition of material, non-ratable benefit. The test is twofold. First, the controller shall receive a unique benefit that is not equally shared by other stockholders.71 But not every such a benefit is relevant—it must be material.72 In defining materiality, the Court weighed heavily on temporality in the sense that to be material, a benefit shall actually exist, not just be future potential.73 Specifically, regarding corporate liability, “[p]roviding protection to directors against future liability exposure does not automatically convey a material non-ratable benefit to directors . . . .”74 Therefore, even assuming that Nevada’s corporate law better protects the controlling shareholder and directors from litigation, in the absence of evidence of “any particular litigation claims will be impaired or that any particular transaction will be consummated post-conversion,”75 the benefit would not be considered material. In this framework, the Court held that because plaintiffs did not allege that the transaction was adopted “to avoid any existing or threatened litigation”76 (emphasis added), the entire fairness standard was not triggered.

With all the due differences, this approach seems to be getting a little closer to the Sinclair test in terms of limiting the application of the entire fairness review to conflicted controlled transactions. In both Sinclair and Maffei, the court did require more than any unique (or non-ratable) benefit provided to the controlling shareholder to apply “Delaware’s most onerous standard.”77 By doing so, Delaware Supreme Court in Maffei partially departs from the common approach to controller transactions.78 That being said, the material, non-ratable benefit requirement differs from the Sinclair test, with the former being less stringent from a plaintiff’s perspective. It requires that the transaction provides the controller with a material benefit that is not equally shared by the stockholders, not that such a benefit is also to the detriment to the minority stockholders.79

Maffei comes in the aftermath of cases that triggered serious dissatisfaction with Delaware corporate law.80 Notably, after Tornetta, the immediate reaction by Elon Musk,81 and In re Match, on April 17, 2024, Tesla filed its proxy statement 2024 announcing the proposal to reincorporate in Texas.82 Just a few days later, on April 23, 2024, the law firm Wilson Sonsini issued a “client advisory” discussing Delaware’s status as the favored corporate home and, more importantly, highlighting that numerous Delaware companies have started to consider changing their corporate domicile.83 Reasons for reconsidering Delaware include the growing skepticism toward controlled transactions and a general negative attitude toward management,84 which mark, for example, the Tornetta decision.85 Legal scholars have noted that the heightened judicial scrutiny of controlled transactions applied inter alia in that decision due to inherent coercion doctrine is in tension with Delaware’s general deference to corporate decisions.86 It also creates uncertainty in the types of controlled transactions that will be subject to entire fairness unless the MFW framework is satisfied;87 it attempts “a hallmark of Delaware corporate law,” i.e., predictability.88 Further, it seems to generally show reverence towards plaintiffs-shareholders, who have been favored by these decisions.89

This recent unrest over Delaware corporate law may grow more significant if framed within the broader (and increasing) competition among states to usurp Delaware’s crown as the leading state for large-company incorporations. Other states—especially Nevada, Delaware’s biggest competitor—are aggressively promoting DExit.90 Such a phenomenon is not new; the Nevada-Delaware competition dates back decades, with Nevada focused on “clearly offering more protection from liability for corporate directors and officers than Delaware,”91 including in the context of controlling transactions.92 However, after years of Delaware’s absolute dominance,93 companies are only now actually considering moving out of Delaware.94

In such a complex backdrop, Maffei might be read as a countertrend. Nonetheless the differences between the transactions and circumstances at hand, compared to Tornetta—which may be considered as the ne plus ultra of the discussed Delaware’s skepticism—95Maffei seems to aim at restoring some flexibility to directors’ business maneuvers and thus protection by adding the materiality prong. Now, Tornetta and Maffei are undoubtedly different, and Musk’s compensation package would highly likely have satisfied the Maffei standard.96 Additionally, the Delaware Supreme Court in Maffei has neither parted ways with nor discussed the new inherent coercion approach discussed above. Yet, it raised the standard that defines the controller transactions subject to entire fairness review. As a result, from a substantive perspective, the Court has also arguably limited the application of such a doctrine as if it were a corrective measure.

In light of such a result and DExit ongoing debate, this paper argues that behind Maffei there might also be a soft retention strategy—a goal to reassure Delaware companies that courts are mindful of, and want to address, the “tension with the fundamental structure of corporate law”97 created by some recent decisions, such as Tornetta. One may argue, correctly, that the Maffei standard does not provide a clear test that increases litigation predictability. Indeed, it is difficult to predict when courts would deem a benefit to be material—the temporality requirement discussed in Maffei helps to determine when a transaction whose effect includes a protection from liability is a relevant benefit for the purpose of the entire fairness review; but outside of this context, it may be of a little help. Nevertheless, the decision clarifies that not every benefit received by the controller that is not equally shared by the stockholders is a non-ratable benefit for the purpose of applying the entire fairness review. This clarification makes the plaintiff’s job harder, excludes certain transactions, and sets a starting point. As discussed above,98 the risk of applying the “inherent coercion” as in Tornetta—later expressly confirmed in In re Match—was to extend the entire fairness standard to every controller transaction, which would undoubtedly benefit plaintiffs’ positions in litigation. In this regard, Maffei may prove valuable.99 Ironically, the Delaware Supreme Court inverted this tendency by favoring directors over plaintiff shareholders in a DExit case in which one of Delaware largest companies sought to reincorporate in Delaware’s primary competitor, Nevada.100 Especially after Tornetta and In re Match, if the Delaware Supreme Court wanted to prevent Tripadvisor’s relocation, it probably would have done so without appearing exotic. After all, in In re Match discussed only some month earlier, the very same Court held that “in a suit claiming that a controlling stockholder stood on both sides of a transaction with the controlled corporation and received a non-ratable benefit, entire fairness is the presumptive standard of review.”101 No materiality was mentioned therein.

B. Impact of SB 21 on Maffei

Delaware’s turmoil is not limited to court decisions. Less than thirteen days after Maffei’s ruling, the DGA dropped a bombshell by proposing SB 21.102 The news spread across financial news and professional social networks, such as LinkedIn, where law professors, legal scholars, and practitioners debated the potential impact of SB 21.103 SB 21 passed with bipartisan backing in the House and Senate and was signed into law on March 25, 2025.104 

Relevantly, SB 21 amends the rule of controlling shareholder transactions as follows: (i) it limits “actual control” by imposing a one-third threshold (plus managerial authority equivalent to a majority owner);105 (ii) it defines what constitutes a controlling stockholder transaction as “an act or transaction between the corporation or 1 or more of its subsidiaries, on the one hand, and a controlling stockholder or a control group, on the other hand, or an act or transaction from which a controlling stockholder or a control group receives a financial or other benefit not shared with the corporation’s stockholders generally” (emphasis added);106 and (iii) it introduces a (new) statutory safe harbor for controlling transactions according to which the business judgment rule applies if the transaction satisfies the new “fair dealing” requirements of § 144(b) or (c).107

By doing so, SB 21 dramatically changes the legal framework of standards of review. On the one hand, it provides a broad statutory definition of controlling transactions, encompassing the two current lines of cases on conflicted transactions emerged after Sinclair,108 but excluding the materiality prong requirement established by the Delaware Supreme Court in Maffei. On the other hand, outside of “controller takeovers,” it lowers the cleansing procedure as either committee approval or stockholder approval suffices; there is no need to secure both, as required under In re Match.109 Consequently, SB 21 would likely result in the overturning of Maffei, among other decisions.110 Notably, if the case had been decided under the new § 144 DGCL, Tripadvisor’s decision to relocate to Nevada likely would have been evaluated under the entire fairness standard. This is because materiality would not have been a determinative criterion, the mere benefit of protecting directors from future liability exposure would have required the transaction to be cleansed by fair dealing, no cleansing device was satisfied, and the controlling status was not even questioned.111

The Delaware legislature’s action fits into the broader context of DExit. Shortly after SB 21 was proposed, Professor Bainbridge claimed that the SB 21 provisions “are a rather blatant effort by the Delaware governor and legislature to nip in the bud the DExit phenomenon.”112

But how would SB 21 hinder DExit? When SB 21 was signed into law, Delaware Governor Matt Meyer said, “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.”113 As of the writing of this paper,114 SB 21 has less than one year old and not been really litigated,115 making predictions about how it will actually shape Delaware corporate law premature.116 The bill has been both criticized117 and supported.118 Without taking a position in the debate, this paper simply draws attention to the timing that it was introduced. Amidst a general dissatisfaction with Delaware corporate law, Maffei has eased the path for some companies to leave Delaware, even if, as this paper argues, it may be part of a soft retention strategy.119 Shortly after that, Nevada—which the very same Court recognizes as one of the states that “are eager to compete by promoting their respective corporate governance regimes”—120announced a proposal to establish a business court.121With this move, Nevada increased the level of the competition for corporate charters; it has targeted one of Delaware’s flagships—i.e. its sophisticated and high-quality judicial body where well-prepared judges with corporate and financial knowledge sit.122 SB 21 was proposed almost simultaneously. The timing of the proposal of “the most significant single-year revision of Delaware’s corporate code since at least 1967”123 is suspicious. It may suggest that the DGA was concerned about the potential snowball effect that Maffei could cause by making it easier to reincorporate out of Delaware. Then, SB 21’s effects on DExit may be twofold: (i) limiting the application of the MFW framework only to the “controller takeovers,” thus alleviating the dissatisfaction that followed Tornetta and In re Match, and, at the same time, (ii) making reincorporation out of the state harder by imposing that at least one cleansing device to be satisfied. 

While the Delaware Supreme Court perhaps wanted to block DExit gently, the DGA opted for a harder approach.

IV. Conclusion

In an already articulated context of Delaware corporate law, Maffei made some noise. In the aftermath of the Chancery Court’s high-profile decision to strike down Elon Musk’s remuneration package, Delaware courts have been criticized for being too sympathetic to plaintiff shareholders and negative to corporate directors. Moreover, DExit to other states—such as Nevada, which is considered more director-friendly—is increasing. In this context, the case at hand seems to buck the trend. Not only does the Court side with directors in a case involving a controlling shareholder transaction, but it also gives a green light to one of Delaware’s largest companies to leave the state. This paper argues that behind Maffei, there may be also an attempt by the Delaware Supreme Court to reassure markets that Delaware remains a welcoming environment for U.S. companies, even at the cost of losing another prominent business. So far, DExit has been considered “likely to remain rare.”124 Therefore, this soft policy approach by the Delaware Supreme Court would make perfect sense. While it would facilitate the relocation of companies outside Delaware, it would also convey the message that the state is aware of its privilege as the domicile for many U.S. companies and recognizes the importance of restoring confidence in directors’ business decisions, which is the foundation of the business judgment rule. 125 But as the assault on Delaware’s crown is getting more aggressive—like Nevada’s proposal to establish a business court—the DGA may have opted for a more aggressive approach to block DExit by passing the SB 21 to overturn some controversial cases. Perhaps Delaware legislators felt the risk of losing corporate dominance; perhaps these events are unrelated, but the timing is certainly suspicious. The only certainty is that the situation in U.S. corporate law is becoming increasingly intense.

  • See generally Lewis S. Black, Jr., Why Corporations Choose Delaware, Del. Dept. of State (2007), https://perma.cc/5GEX-NFV3. For an exceptional evaluation of legal and corporate governance considerations relevant for choosing the state of incorporation, including a discussion on Delaware’s dominance, see Professor Anthony J. Casey’s report included in Tesla’s Proxy Statement 2024, see Anthony J. Casey, Report of Professor Anthony J. Casey, in Tesla Proxy Statement 2024 (Schedule 14A), Exhibit D of Annex E (“Report of the Special Committee of the Board of Directors of Tesla”) (April 17, 2024), https://www.sec.gov/Archives/edgar/data/1318605/000110465924048040/tm2326076d13_pre14a.htm. 
  • Tornetta v. Musk, 310 A.3d 430 (Del. Ch. 2024) (“Tornetta”). Tornetta has been recently reversed by the Delaware Supreme Court in In re Tesla, Inc. Derivative Litig., Nos. 534, 2024; 10, 2025; 11, 2025; 12, 2025, 2025 WL 3689114 (Del. Dec. 19, 2025) (en banc) (per curiam). However, despite this result, the Delaware Supreme Court did not touch the key issue discussed in this paper, i.e., the “controller” status, rather it grounded the reversal on the remedy granted by the Delaware Chancery Court (i.e., the rescission of Musk’s compensation package).
  • Amy L. Simmerman, Brad Sorrels, William B. Chandler III, et. al., Wilson Sonsini Goodrich & Rosati, Delaware's Status as the Favored Corporate Home: Reflections and Considerations, Harv. L. Sch. F. Corp. Governance (Apr. 23, 2024), https://perma.cc/T488-7E3A.   
  • See Jonathan R. Macey, Delaware Law Mid-Century: Far From Perfect but Probably Not Leaving for Las Vegas (last revised, Jan. 30, 2025), https://download.ssrn.com.    
  • See generally Stephen M. Bainbridge, DExit Drivers: Is Delaware’s Dominance Threatened? 50 J. Corp. L. 824, 825 (2025).
  • Id. 
  • See generally Maffei et al. v. Palkon et al., 339 A.3d 705 (Del. 2025) (“Maffey”).
  • Id. at 711.
  • See Gail Weinstein, Philip Richter, and Steven Epstein, Fried, Frank, Harris, Shriver & Jacobson LLP, Delaware Supreme Court Overturns Tripadvisor Decision, Providing a Clearer Path for Reincorporation,Harv. L. Sch. F. Corp. Governance (Feb. 27, 2025), https://corpgov.law.harvard.edu/2025/02/27/delaware-supreme-court-overturns-tripadvisor-decision-providing-a-clearer-path-for-reincorporation/; Jonathan Stempel, Delaware Supreme Court Eases Path for some Companies to Leave State, Reuters (Feb. 4, 2025), https://www.reuters.com/legal/delaware-supreme-court-eases-path-some-companies-leave-state-2025-02-04/.
  • Sinclair Oil Corp. v. Levien, 280 A.2d 717 (Del. 1971) (“Sinclair”).
  • S.B. 21, 153rd Gen. Assemb. § 1 (Del. 2025) (“SB 21”); Eric Talley, Sarath Sanga and Gabriel V. Rauterberg, Delaware Law’s Biggest Overhaul in Half a Century: A Bold Reform – or the Beginning of an Unraveling?CLS Blue Sky Blog (February 18, 2025), https://clsbluesky.law.columbia.edu/2025/02/18/delaware-laws-biggest-overhaul-in-half-a-century-a-bold-reform-or-the-beginning-of-an-unraveling/.
  • Id. at 35; Tornetta, 310 A.3d at 497; Chen v. Howard-Anderson, 87 A.3d 648, 666 (Del. 2014) (citing Reis v. Hazelett Strip–Casting Corp., 28 A.3d 442, 457 (Del. 2011)).
  • Chen, 87 A.3d at 672 (Del. 2014).
  • Unocal Corp. v. Mesa Petroleum Co., 493 A.2d 946, 955 (Del. 1985). See generally Mary Siegel, The Problems and Promise of “Enhanced Business Judgment”, 17 U. Pa. J. Bus. L. 47, 48 (2015).
  • See Smith v. Van Gorkom, 488 A.2d 858, 872 (Del. 1985) (“Van Gorkom”) (citing Aronson v. Lewis, 473 A.2d 805, 811 (Del. 1984)) (“The rule itself is a presumption that in making a business decision, the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company”).
  • Id.
  • See Gantler v. Stephens, 965 A.2d 695, 706 (Del. 2009) (affirming Cede & Co. v. Technicolor, Inc., 634 A.2d 345, 361 (Del. 1993), modified, 636 A.2d 956 (Del. 1994)) (“On a motion to dismiss, the pled facts must support a reasonable inference that in making the challenged decision, the board of directors breached either its duty of loyalty or its duty of care.”).
  • Id. See also Stephen M. Bainbridge, A Course Correction for Controlling Shareholder Transactions, 49 Del. J. Corp. L. 525, 559 (2025).   
  • William T. Allen, Jack B. Jacobs, and Leo E. Strine Jr., Function Over Form: A Reassessment of Standards of Review in Delaware Corporation Law, 56 Bus. Law. 1287, 1297 (2001).
  • Id.
  • Unitrin, Inc. v. American General Corp., 651 A.2d 1361, 1371 n.7 (Del. 1995).
  • See Bainbridge, A Course Correction, supra note 19, at 33 (citing Kahn v. Lynch Commun. Sys., Inc., 638 A.2d 1110, 1115 (Del. 1994)).
  • Elizabeth Pollman and Lori W. Will, The Lost History of Transaction-Specific Control, 50 J. of Corp. L. 1095, 1099, 1108 (2025) (“Stockholders generally owe no fiduciary duties.  . . .  Minority stakeholders that cannot exercise effective control over the company through substantial voting power are free to pursue their self-interests) (emphasis added).
  • Id. at 1099.
  • Id. at 1101.
  • In re Cysive, Inc. Shareholders Litigation, 836 A.2d 531, 553 (Del. Ch. 2003).
  • Pollman, supra note 24, at 1103.
  • See Stephen M. Bainbridge, A Course Correction, supra note 19, at 583.
  • In re Match Grp., Inc. Deriv. Litig., 315 A.3d 446 (Del. 2024) (“In re Match”).
  • Id. at 451.
  • Maffei, 339 A.3d at 710-11.
  • Id. at 710.
  • Id.
  • Id. at 711.
  • Id.
  • Id.
  • Id.
  • See, e.g., Mary Siegel, The Erosion of the Law of Controlling Shareholders, 24 Del. J. Corp. L. 27, 50 (1999) (“Sinclair was a significant development in the law of controlling shareholders because the court refused to require all parent-subsidiary transactions to be judged by the intrinsic fairness test, despite the parent’s complete domination of the subsidiary’s board of directors”); Daniel J. Morrissey, M & A Fiduciary Duties: Delaware’s Murky Jurisprudence, 58 Vill. L. Rev. 121, 127, 132 (2013) (referring to the cases discussed in Part II of the paper, including Sinclair, as “the seminal Delaware cases that established [fiduciary] duties.”); Jill E. Fisch and Steven Davidoff Solomon, Control and Its Discontents, 173 U. Pa. L. Rev. 641, 659 (2025) (“Delaware set out the context in which controlling shareholders would be treated as fiduciaries in Sinclair Oil Corp v. Levien.”).
  • Sinclair, 280 A.2d at 720.
  • Id.
  • Id.
  • See Bainbridge, A Course Correction, supra note 19, at 565-67.
  • Citron v. E.I. Du Pont de Nemours & Co., 584 A.2d 490, 500 n. 13 (Del. Ch. 1990).
  • See Bainbridge, A Course Correction, supra note 19, at 565.
  • Id.
  • Id. at 566 (quoting Lacey on behalf of S. Copper Corp. v. Mota-Velasco, No. CV 2019-0312-SG, 2021 WL 508982, *9 (Del. Ch. Feb. 11, 2021)).
  • Kahn v. Lynch Commun. Sys., Inc., 638 A.2d 1110 (Del. 1994) (“Lynch”)
  • Stephen M. Bainbridge, A Course Correction, supra note 19, at 540.
  • Lynch, 638 A.2d at 1116.
  • Id. 
  • Id. (“[e]ntire fairness remains the proper focus of judicial analysis in examining an interested merger, irrespective of whether the burden of proof remains upon or is shifted away from the controlling or dominating shareholder, because the unchanging nature of the underlying ‘interested’ transaction requires careful scrutiny.” (citing Weinberger v. UOP, Inc., 457 A.2d 701, 710 (Del. 1983); Citron v. E.I. Du Pont de Nemours & Co., 584 A.2d 490, 502 (Del. 1990))).
  • Kahn v. M & F Worldwide Corp., 88 A.3d 635 (Del. 2014), overruled on other grounds by Flood v. Synutra, Int’l, Inc., 195 A.3d 754 (Del. 2018); In re Match, 315 A.3d at 462 (Del. 2024).
  • See Bainbridge, A Course Correction, supra note 19, at 540.
  • Id.
  • Id. at 580.
  • Id.
  • Concerns about applying the inherent coercion theory beyond freeze-out mergers are raised in Lawrence Hamermesh, Jack B. Jacobs, and Leo E. Strine, Jr., Optimizing the World’s Leading Corporate Law: A 20-Year Retrospective and Look Ahead, 77 Bus. Law. 321, 336-44 (2022); Stephen M. Bainbridge, A Course Correction, supra note 19, at 581.
  • See Stephen M. Bainbridge, A Course Correction, supra note 19, at 580 (“In Tornetta v. Musk, for example, Vice Chancellor Slights observed that the risk of coercion is just as present when a conflicted controller enters into a compensation arrangement as when it proposes a freezeout merger:”).
  • Tornetta, 310 A.3d at 446 (citing the article, Assaf Hamdani & Kobi Kastiel, Superstar CEOs and Corporate Law, 100 Wash. U. L. Rev. 1353, 1400 (2023), which developed the concept of a Superstar CEO).
  • Id. at 446 (“The collection of features characterizing Musk’s relationship with Tesla and its directors gave him enormous influence over Tesla. In addition to his 21.9% equity stake, Musk was the paradigmatic “Superstar CEO,” who held some of the most influential corporate positions (CEO, Chair, and founder), enjoyed thick ties with the directors tasked with negotiating on behalf of Tesla, and dominated the process that led to board approval of his compensation plan. At least as to this transaction, Musk controlled Tesla.”).
  • Id. at 520.
  • Id.
  • I.e., an approval by a well-functioning committee of independent directors or by an informed vote of a majority of the minority shareholders. See Tornetta, 310 A.3d at 522.
  • In re Match, 315 A.3d at 451.
  • Elon Musk (@elonmusk), X (Jan. 30, 2024), https://perma.cc/HVP6-4GKT.  
  • Tornetta, 310 A.3d at 445.
  • See Bainbridge, A Course Correction, supra note 19, at 581.
  • Maffei, 339 A.3d at 712.
  • Id. at 730 (citing In re Crimson Expl. Inc. S’holder Litig., 2014 WL 5449419, at *12 (Del. Ch. Oct. 24, 2014)).
  • Id. at 744.
  • Id. at 731-32.
  • Id. at 732.
  • Id. at 733.
  • Id.
  • Id.
  • Id. at 739.
  • See In re Trados Inc. S’holder Litig. (Trados II), 73 A.3d 17, 44 (Del. Ch. 2013) (explaining that entire fairness is “Delaware’s most onerous standard”). 
  • E.g., In re Tilray, Inc. Reorg. Litig., No. CV 2020-0137-KSJM, 2021 WL 2199123 at *31 (Del. Ch. June 1, 2021) (“Multiple decisions of this court have impliedly rejected Defendants’ argument, finding that entire fairness presumptively applies whenever a controller extracts a non-ratable or unique benefit.”).
  • See Stephen M. Bainbridge, Delaware Supreme Court Decides TripAdvisor Case: DExit Governed by the Business Judgment Rule Rather Than Entire Fairness: Compared to my Proposed Course Correction, ProfessorBainbridge.com (Feb. 4, 2025), https://web.archive.org/web/20250423121308/https://www.professorbainbridge.com/professorbainbridgecom/2025/02/delaware-supreme-court-decides-tripadvisor-case-dexit-governed-by-the-business-judgment-rule-rather-.html (“While the Court does cite Synthes (which in turn quoted Sinclair Oil) for the proposition that a conflicting interest exists when the controller “derived a personal financial benefit 'to the exclusion of, and detriment to, the minority stockholders,'” it does not establish this as a requirement. Rather, the Court's broader discussion suggests that the key inquiry is whether the controller receives a unique or differential benefit, regardless of whether that benefit actively harms or excludes the minority.”).
  • See, e.g., Wilson Sonsini Goodrich & Rosati, supra note 3. (“In the conversations that we have had with clients, businesspeople, and others in the corporate bar, we have heard the following reasons given for reconsidering incorporation in Delaware: … a perception that Delaware judges have in several opinions adopted an increasingly suspicious or negative tone toward corporate boards and management, and toward the corporate bar. The challenges that the case law can pose for companies with influential founders or significant stockholders, the process mechanisms that such companies are expected to use, and the remedies that have been reached in those cases …”); Rose Krebs, Delaware’s Corp. Law Dominance A Hot Topic At Tulane Conference, Law360.com (March 7, 2024), https://www.law360.com/articles/1811403/del-s-corp-lawdominance-a-hot-topic-at-tulane-conference; Stephen M. Bainbridge, DExit Drivers: Is Delaware’s Dominance Threatened?, supra note 5, at 4-5.
  • See supra note 66 and accompanying text.
  • See Tesla, Proxy Statement 2024 (Schedule 14A) (April 17, 2024), https://www.sec.gov/Archives/edgar/data/1318605/000110465924048040/tm2326076d13_pre14a.htm.  
  • See Wilson Sonsini Goodrich & Rosati, supra note 3.
  • Id.
  • See, e.g., Fisch, supra note 39, at, 644 (“Together, the Tornetta, Sears Hometown, and Match decisions highlight Delaware courts’ growing skepticism toward corporate actions in controlled companies.”).
  • Id. at 646, 679.
  • Id. at 690.
  • Pollman, supra note 24, at 1096.
  • See Jonathan R. Macey, Delaware Law Mid-Century: Far From Perfect but Probably Not Leaving for Las Vegas, supra note 4, at 5.
  • See Stephen M. Bainbridge, DExit Drivers: Is Delaware’s Dominance Threatened?, supra note 5, at 3.
  • Michal Barzuza, Nevada v. Delaware: The New Market for Corporate Law 16 (ECGI Law, Working Paper No. 677/2251, 2024). Professor Lipton referred to Nevada as the state “where you incorporate if you want to do frauds.” See Ann Lipton (@annmlipton@esq.social), esq.social (Apr. 10, 2023), https://esq.social/@annmlipton/110176723539696305.
  • A recent case discussed before the Supreme Court of Nevada may help to clarify how Nevada is more directors-friendly. In Guzman v. Johnson, a controlling transaction case involving a merger, the Court held that Nevada’s statutory business judgment rule, enshrined in NRS 78.138(7), “supplies the sole avenue to hold directors and officers individually liable for damages arising from official conduct” and it can be rebutted only by demonstrating that the alleged breach of fiduciary duty by directors or officers “involved intentional misconduct, fraud, or a knowing violation of the law.” See Guzman v. Johnson, 483 P.3d 531, 537, 534 (Nev. 2021). In so doing, the Court “parts ways with the rigorous “entire fairness” test developed in Delaware and certain other states for reviewing interested fiduciary transactions.” It also clarifies that Nevada law does not require MFW framework to be satisfied in order to benefit from the protection of the business judgment rule. See Brian T. Frawley and John L. Hardiman, Sullivan & Cromwell LLP, Nevada Supreme Court Holds Statutory Business Judgment Rule Applies to All Claims Against Corporate Officers and Directors, Harv. L. Sch. F. Corp. Governance (May 8, 2024), https://corpgov.law.harvard.edu/2021/05/08/nevada-supreme-court-holds-statutory-business-judgment-rule-applies-to-all-claims-against-corporate-officers-and-directors/.
  • See Casey, supra note 1, at 5-6.
  • See supra note 84. and accompanying text.
  • For the sake of completeness, the criticism of the court’s decision in Tornetta extends beyond the justification of inherent coercion used for the compensation package. See e.g. Jonathan R. Macey, Presentation of Arguments in a Brief of Current and Retired Practitioners and Professors as Amici Curiae in Support of Reversal of the Opinion of the Delaware Court of Chancery in In Re Tesla, Inc. Derivative Litigation, Harv. L. Sch. F. Corp. Governance (Apr. 24, 2025), https://corpgov.law.harvard.edu/2025/04/24/presentation-of-arguments-in-a-brief-of-current-and-retired-practitioners-and-professors-as-amici-curiae-in-support-of-reversal-of-the-opinion-of-the-delaware-court-of-chancery-in-in-re-tesla-inc-de/?utm_source=feedly&utm_medium=rss&utm_campaign=presentation-of-arguments-in-a-brief-of-current-and-retired-practitioners-and-professors-as-amici-curiae-in-support-of-reversal-of-the-opinion-of-the-delaware-court-of-chancery-in-in-re-tesla-inc-de.
  • In arguing that the entire fairness test applied to conflicted-controller transactions, plaintiffs referred to a case where the court held that “under Delaware law, transactions between a controlling shareholder and the corporation it controls are reviewed for entire fairness.” See Monroe County Employees’ Retirement System v. Carlson, 2010 WL 2376890 at *1 (Del. Ch. June 7, 2010).
  • Fisch, supra note 39, at 646.
  • See supra note 68 and accompanying text.
  • The intuition of limiting the effect of the new inherent coercion by increasing the threshold defining conflicted controlling transactions is discussed also by Professor Bainbridge. See Stephen M. Bainbridge, A Course Correction, supra note 19, at 586 (“Extending MFW to all conflicted controller transactions should be far less controversial if my proposed course corrections are adopted. … Entire fairness review would only be invoked if the controller received gains at the expense of and to the exclusion of the minority, which alleviates concerns about overbreadth as to the definition of conflicted controller transactions”).  
  • As of May 1, 2025, TripAdvisor would be the twelfth largest company in Delaware by market capitalization, at $1.619 billion (Phreesia is now the twelfth with $1473 billion). See 
    Biggest Companies in Delaware by Market Cap for May 2025, FinanceCharts.com (last visited May 1, 2025), https://www.financecharts.com/screener/biggest-state-de?__cf_chl_tk=FOPfj.oDtXvFY0xXj3HeoG..4kxyFqIFYxNG418UW7E-1746148148-1.0.1.1-cuAbVJrWglN26bNM6ByDd.j7v36u7z9JPdlbHIk0XgE; Tripadvisor, Inc. market profile, Yahoo!finance (last visited May 1, 2025), https://finance.yahoo.com/quote/TRIP/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAF61gpofee6GmQJUiedRODnpAHf6sIQoCsqk1FReAXyFSVbeVCv2il6yEwIu6Ob-qcksFEx7EQMINJyFiuoxgTjgMhhdIbS56d697WOvRGFpNiJ9noblQt8O6y7_cizvz3_nNKfc_c0lxatfCiSZPOba6jnyWzChGn26GTscDyNs.
  • In re Match, 315 A.3d at 451.
  • S.B. 21, 153d Gen. Assemb., Reg. Sess. (Del. 2025) (introduced Feb. 17, 2025), https://legis.delaware.gov/BillDetail/141857.
  • See, e.g., Stephen Bainbridge (@Stephen Bainbridge), LinkedIn, https://www.linkedin.com/posts/stephen-bainbridge-266027227_corporatelaw-delawarecorporatelaw-delawaresb21-activity-7300916844419330048-HV7F?utm_source=share&utm_medium=member_desktop&rcm=ACoAACvoUWYBSfWFKy13z0j5WXsy9YgvoH4bpnQ; John Coates (@JohnCoates), LinkedIn, https://www.linkedin.com/posts/john-coates-505990b_sb21-texas-nevada-activity-7309909244948983808-Zzw4?utm_source=share&utm_medium=member_desktop&rcm=ACoAACvoUWYBSfWFKy13z0j5WXsy9YgvoH4bpnQ; Eric Talley (@EricTalley), LinkedIn, https://www.linkedin.com/posts/eric-talley-808b52b_nevada-proposes-appointed-business-court-activity-7298317939135467520--bYo?utm_source=share&utm_medium=member_desktop&rcm=ACoAACvoUWYBSfWFKy13z0j5WXsy9YgvoH4bpnQ; Murray Beach (@Murray Beach), LinkedIn, https://www.linkedin.com/posts/murraybeach_the-bill-sb-21-which-is-progressing-through-activity-7307748501227012096-xnNF?utm_source=share&utm_medium=member_desktop&rcm=ACoAACvoUWYBSfWFKy13z0j5WXsy9YgvoH4bpnQ; Frank Aquila (@FrankAquila), LinkedIn, https://www.linkedin.com/posts/frank-aquila-073363104_delawarelaw-corporategovernance-businesslaw-activity-7311449444409851905-dyXw?utm_source=share&utm_medium=member_desktop&rcm=ACoAACvoUWYBSfWFKy13z0j5WXsy9YgvoH4bpnQ; Andrew Blumberg (@AndrewBlumberg), LinkedIn, https://www.linkedin.com/posts/andrew-blumberg-58aa2443_delaware-sb-21-hypothetical-the-controlling-activity-7299449523754418176-GK03?utm_source=share&utm_medium=member_desktop&rcm=ACoAACvoUWYBSfWFKy13z0j5WXsy9YgvoH4bpnQ; Ann Lipton (@AnnLipton), LinkedIn, https://www.linkedin.com/posts/ann-m-lipton_oh-a-thing-i-just-caught-on-sb-21-it-deletes-activity-7305995090798288897-zjlQ?utm_source=share&utm_medium=member_desktop&rcm=ACoAACvoUWYBSfWFKy13z0j5WXsy9YgvoH4bpnQ; Jeffrey Gordon (@Jeffrey Gordon), LinkedIn, https://www.linkedin.com/posts/jeffrey-gordon-21a174133_commitment-and-optionality-for-controllers-activity-7304312387405303808-VHTu?utm_source=share&utm_medium=member_desktop&rcm=ACoAACvoUWYBSfWFKy13z0j5WXsy9YgvoH4bpnQ; Gregory V. Varallo (@GregoryV.Varallo), LinkedIn, https://www.linkedin.com/posts/gregory-v-varallo-5a10a21_regardless-of-its-merits-the-new-delaware-activity-7301616736162697218-5GO7?utm_source=share&utm_medium=member_desktop&rcm=ACoAACvoUWYBSfWFKy13z0j5WXsy9YgvoH4bpnQ, commenting Professor Roberto Tallarita’s thoughts (see Roberto Tallarita (@RobertoTallarita), LinkedIn, https://www.linkedin.com/posts/roberto-tallarita-86270747_regardless-of-its-merits-the-new-delaware-activity-7297637283833282560-IZSH?utm_source=share&utm_medium=member_desktop&rcm=ACoAACvoUWYBSfWFKy13z0j5WXsy9YgvoH4bpnQ: Thomas G. James (@ThomasG.James), LinkedIn, https://www.linkedin.com/posts/thomasg-james_i-have-never-posted-on-linkedin-before-but-activity-7299832560300220416-x8hH?utm_source=share&utm_medium=member_desktop&rcm=ACoAACvoUWYBSfWFKy13z0j5WXsy9YgvoH4bpnQ. See also generally the materials collected by Lauren Pringle (@LaurenP), LinkedIn, https://www.linkedin.com/posts/activity-7303844708693291009-D4Kd?utm_source=share&utm_medium=member_desktop&rcm=ACoAACvoUWYBSfWFKy13z0j5WXsy9YgvoH4bpnQ.
  • Governor Meyer Signs SB21 Strengthening Delaware Corporate Law (Mar. 26, 2025), https://news.delaware.gov/2025/03/26/governor-meyer-signs-sb21-strengthening-delaware-corporate-law/
  • S.B. 21, supra note 12, § 1 (creating new DGCL § 144(e)(2)).
  • Id. new DGCL § 144(e)(3).
  • Id. Synopsis.
  • See supra note 43 and accompanying text.
  • See supra note 65. That said, a recent piece by Professors Kahan and Rock suggests that SB 21 would create a dual regime—one statutory, governed by the new § 144, and one based on common law—instead of replacing the framework developed by Delaware courts. See Marcel Kahan and Edward Rock, What Newly Amended DGCL §144 Says (and Does Not Say) about Controlling Stockholder Transactions, Harv. L. Sch. F. Corp. Governance (Jun. 5, 2025), https://corpgov.law.harvard.edu/2025/06/05/what-newly-amended-dgcl-%C2%A7144-says-and-does-not-say-about-controlling-stockholder-transactions/, in which the professors discuss a hypothetical that would still be analyzed under Delaware’s common law of fiduciary duty, suggesting that In re Match might actually survive the enactment of SB 21. See also Theodore N. Mirvis, SB 21’s § 144 and Controlling Stockholders: Back to the Future?, Harv. L. Sch. F. Corp. Governance (Nov. 5, 2025), https://corpgov.law.harvard.edu/2025/11/05/sb-21s-%C2%A7-144-and-controlling-stockholders-back-to-the-future/ (“The claim advanced is that the “actual language” of the new § 144 “Safe Harbor Provision” does not inter Match but “instead draws a distinction between statutory controllers and common law controllers and leaves Delaware’s law on the latter untouched.”  Match lives?”).
  • See Eric Talley (@EricTalley), LinkedIn, https://www.linkedin.com/posts/eric-talley-808b52b_del-supreme-court-cases-overturned-by-sb21-activity-7299162202542886912-F71H?utm_source=share&utm_medium=member_desktop&rcm=ACoAACvoUWYBSfWFKy13z0j5WXsy9YgvoH4bpnQ, where Professor Talley has uploaded a google doc listing “all the Delaware Supreme Court opinions that, in my estimation, are likely to be overturned by the proposed legislation.”
  • Maffei, 339 A.3d at 719 (“The court noted that the parties agreed that Maffei controlled the corporations and that there were no cleansing actions. Accordingly, the court held that the standard of review “depends on whether the conversions conferred a non-ratable benefit on the fiduciary defendants.””).
  • See Stephen M. Bainbridge, Delaware SB 21 and Director and Officer Conflict of Interest Transactions: The Good, the Bad, and the Missed Opportunities, ProfessorBainbridge.com (Feb. 19, 2025), https://www.professorbainbridge.com/professorbainbridgecom/2025/02/delaware-sb-21-and-director-and-office-conflict-of-interest-transactions-the-good-the-bad-and-the-mi.html#_ftnref1.
  • Governor Meyer Signs SB21 Strengthening Delaware Corporate Law (March 26, 2025), https://news.delaware.gov/2025/03/26/governor-meyer-signs-sb21-strengthening-delaware-corporate-law/.
  • January 2026.
  • That said, on November 5, 2025, the Delaware Supreme Court heard oral argument in Rutledge v. Clearway Energy Group LLC, in which plaintiff argues that SB 21 violates the Delaware Constitution. See Stephen M. Bainbridge, The (State) Constitutionality of Delaware SB 21’s Safe Harbors for Conflicted Controller Transactions, Bainbridge on Corporations (Nov. 5, 2025), https://www.bainbridgeoncorporations.com/p/the-state-constitutionality-of-delaware.
  • See supra note 110.
  • See, e.g., Lucian Bebchuk, Delaware: The Empire Strikes Back, Harv. L. Sch. F. Corp. Governance (Mar. 4, 2025), https://corpgov.law.harvard.edu/2025/03/04/delaware-the-empire-strikes-back/; Allegra Abramson, DExit vs. the “Billionaire’s Bill:” How S.B. 21 Will Reshape Delaware’s Courts, The Temple 10-Q (Apr. 3, 2025), https://www2.law.temple.edu/10q/dexit-vs-the-billionaires-bill-how-s-b-21-will-reshape-delawares-courts/ (quoting corporate litigator Greg Varallo “Varallo referred to the now-enacted S.B. 21 as the “Billionaire’s Bill,” stating it would be catastrophic for Delaware to enact changes to well-established precedent simply because special interests were unhappy with outcomes in court. These “special interests” that Varallo referenced are, among others, controllers of Delaware corporations who directly benefit from the bill. Although Elon Musk has reincorporated his companies out of state, he was found to be at least a “situational” controller in recent litigation in Delaware, in Tornetta v. Musk.”).
  • See, e.g., Stephen M. Bainbridge, Courts are not omniscient and/or sacrosanct. Not even Delaware courts. The law governing conflicted controller transactions needs a legislative fix, ProfessorBainbridge.com (Apr. 3, 2025), https://www.professorbainbridge.com/professorbainbridgecom/2025/03/courts-are-not-omniscient-andor-sacrosanct-not-even-delaware-courts-the-law-governing-condlicted-con.html.
  • See supra part III.A.
  • Maffei, 339 A.3d at 4.
  • See Benjamin P. Edwards, Nevada Proposes Appointed Business Court, Bus. L. Prof Blog (Feb. 20, 2025), https://perma.cc/Y9A3-G6ZA. 
  • See Black, supra note 1, at 5-6.
  • Talley, Sanga and Rauterberg, supra note 12.
  • See Stephen M. Bainbridge, DExit Drivers: Is Delaware’s Dominance Threatened?, supra note 5, at 6.
  • This is clearly stated by the Court in the introduction to the Maffei opinion. See Maffei, 339 A.3d at 710 (“Delaware is privileged to serve as the domicile for many of our nation’s corporations and other business entities”).