]Myth: Delaware has won a race to the bottom by favoring manager interests over the interests of shareholders.
Fact: Many businesses choose to incorporate in Delaware because Delaware provides a well-developed body of corporate law (applied in an efficient manner by expert judges)27 that makes Delaware corporations more effective creators of value.28 Delaware does this by permitting managers and directors to make good-faith business decisions—including taking business risks in the corporation’s best interests29—as well as by policing and punishing disloyal conduct and conflicts of interest.30 This balanced corporate law stakes out a middle ground between states that have deliberately crafted their corporate law to be more protective of directors, officers, and controlling shareholders,31 and other states that have sought to tilt the balance more in favor of minority shareholders.32 Largely for these reasons, many scholars believe either that there is no race for corporate charters33 or that the race is or was to the top.34
On balance, there is arguably no other U.S. state that provides stockholders with more rights and flexibility than Delaware grants stockholders, nor whose courts have so consistently vindicated the rights of stockholders in litigation. By contrast, a majority of Delaware’s sister states compete with Delaware by being more protective of managers.35 These states have strong anti-takeover statutes and related laws that impede takeovers and limit the extent to which corporate managers must make the stockholder’s best interests their primary concern.36
Precisely because its law is balanced and flexible, and protects investors legitimate interests, Delaware is the U.S. domicile favored both by most investors in and most managers of American public companies.
So as stated before, is intervening in the CBV case, bolster the shareholder case, based on Delaware law. Folks just 2 cents. Football is much easier.
AI
