Delaware

Companies including Dole and Ancestry.com are souring on Delaware as the place of their incorporation, The Wall Street Journal's Liz Hoffman reports: "Dole is one of several companies that say the state has become less hospitable toward business. Among their gripes: a growing tide of shareholder litigation, which some feel the state hasn’t done enough to curb. One new measure bars companies from shifting their legal fees to shareholders who sue and lose—a boon to would-be plaintiffs."

One of the main complaints from Dole and Ancestry.com is against appraisal suits, which require companies to pay interest on the value of all claims disputing the price paid.

Delaware is the legal home to 54 percent of public companies, and the Delaware Court of Chancery has had its filings increase by 20 percent between 2003 and 2012, the WSJ reports.

Legislation has been introduced in Delaware to open up that state's two public universities to public-records requests, The News Journal's Jon Offredo reports. A similar effort was made last year, but the bill was narrowed to only require the universities to supply documents related to contracts funded with taxpayer dollars. Delaware and Pennsylvania are the only states that exempt public universities from open records laws.

The prognosis for the legislation may not be strong. Sponsor Rep. John Kowalko, however, was removed from the House Education Committee and stripped from his chairmanship of the House Energy Committee after criticizing the governor's education policies, Offredo reports.

We already knew that Delaware was the land of corporations. But Steven Davidoff Solomon writes in DealBook that, because more than 60 percent of public companies are incorporated in Delaware, the state's judiciary are imposing their "worldview of deal-making" and influencing how other state courts interpret corporate law: the "concepts of impartiality and independence are the guiding principles of Delaware’s view of mergers and acquisitions. It means that Delaware is pushing for deals to be approved and vetted by independent directors. More important, these directors should obtain conflict-free advice that is both studied and considered. And a record should be made or else — so that the Delaware courts can carefully scrutinize the transaction." As a result, Davidoff Solomon reports that stapled financing--in which a bank would offer financing to prospective buyers of a company its advising during a deal--is all but dead. And companies, in order to avoid conflicts, now funnel deals "through independent directors advised by lawyers and bankers who are also independent."

Delaware Business Court Insider's Jeff Mordock reported this week on Leo E. Strine Jr.'s confirmation as the chief justice of the Delaware Supreme Court. While Delaware is a preferred forum for America's corporations, one thing that struck me about Jeff's coverage is that Strine said he plans to focus on family court, which is an often overlooked area of law: "'One of the things I never forget is how important Family Court is. The Justice of the Peace Court comes into contact with more Delaware residents than any other court. The challenge of delivering the high-quality justice our court has done with limited resources is a daunting one and I'm committed to giving my all to do that. My background has positioned me well to understand the challenges of my colleagues in the other courts."'

Strine also defended the Court of Chancery's confidential arbitration program against the argument that it violates the First Amendment. Delaware is appealing to the U.S. Supreme Court in a last-ditch attempt to reinstate the program after the Third Circuit struck it down.

After the Third Circuit rejected the Delaware Court of Chancery from overseeing private arbitrations, Delaware has asked the U.S. Supreme Court to review what some called "secret trials," Reuters reports. "The arbitration process was seen by Delaware attorneys as a key to boosting the attractiveness of the Court of Chancery," Reuters further reports. "It was also considered economically important to the state, as at least one company in an arbitration dispute had to be incorporated in Delaware."

Leo Strine, current chancellor of the Delaware Court of Chancery, has been nominated to lead the Delaware Supreme Court, Delaware Law Weekly's Jeff Mordock writes in a more indepth report on this week's development: "'Strine heads the most important business court in the world,' said Thomas J. Reed, a professor at Widener University School of Law, after the chancellor had submitted his application. 'He's been there for a long time and the Delaware Supreme Court's docket is driven by filings and decisions from the Chancery Court. He knows business law inside and out and that gives him a tremendous edge,'" Mordock reports.

The epicenter of corporate law has a new leader. The Wall Street Journal reports that Leo Strine, the colorful and outspoken head of the Court of Chancery, is going to be nominated to lead the Delaware Supreme Court.

Delaware may be an itty-bitty-sized state, but its impact on the American legal system is outsized because so many companies incorporate under Delaware law. Reuters reports "the state's tight-knit legal community is abuzz over whether the outspoken head of the Court of Chancery, Leo Strine, will become chief justice of the state's Supreme Court."

Delaware Law Weekly's Jeff Mordock reported earlier this month "the competition to become the next chief justice is a close two-horse race between Delaware Court of Chancery Chancellor Leo E. Strine Jr. and Superior Court Judge Jan R. Jurden." The full DLW story: http://www.delawarelawweekly.com/PubArticleDLW.jsp?id=1202619541308&slre...