The largest shopping mall in the country has announced that it will no longer incorporate its company in Delaware, citing concerns about courts’ increasingly liberal behavior.
Simon Property Group, a $60 billion S&P 500-listed company, said last week that it no longer could rely on Delaware’s courts because they now allow “meritless litigation” and “judicial interpretation” without a “clear statutory bias”, Law.com reported.
Elon Musk made a similar decision to move Tesla and SpaceX out of Delaware last year.
Delaware’s corporate legal system was once considered the gold standard.
Musk’s warnings have been echoed by major corporations that the blue state is simply too awake for any business to settle there.
According to recent press reports, corporate giants such as Meta, the parent company of Facebook, and Walmart are planning on moving their domiciles from Delaware.
Coinbase’s chief legal officer Paul Grewal said on X, “Delaware faces a serious risk of losing its position as the top state for incorporating American companies.”
Bill Ackman (CEO of Pershing Square Capital Management) said in an X-post in early February that he intended to move his company’s management out of Delaware and reincorporate it in Nevada or Texas.
Recent court rulings have prompted concern.
Delaware Chancellor Judge Kathaleen McCormick ruled in December that Musk was ineligible for a 2018 Compensation Package valued at $56 billion, which would be worth more than $100 billion today.
Musk, who was unhappy with McCormick’s decision, took to X and wrote, “Shareholders, not judges, should control the votes of companies.” The billionaire has encouraged other companies to move out of Delaware and into other states.
Some critics claimed that Judge McCormick was a Democrat who acted to confiscate Musk’s legitimate compensation approved twice by Tesla shareholders because Musk had criticized the Biden administration, and opened X to conservatives.
McCormick said Musk’s compensation package was excessive but awarded $345 million to the law firm that sued the deal for its legal filings. Musk’s award of compensation did not cause any harm to the law firm.
In 2023, Fox News settled with Dominion Voting Systems in a libel case for $787 million. This was the highest amount ever paid in a defamation suit.
Viet Ding, Fox News’s former legal chief, attacked the Delaware courts shortly after the settlement. He said the judge had not allowed the network to use a standard defense for libel, which included showing the network’s balanced coverage of the 2020 elections to a possible jury.
Delaware Gov. Matt Meyer told Business Insider that the state has a credibility issue, but he said he will try to bring back companies who leave.
Meyer told the outlet, “Any company considering leaving, we are actively reaching out to them. We’re talking with them, understanding the issues, and understanding how we can improve. And those companies that have decided to leave we will continue to work to earn their trust and hopefully have them return.”
