Sharp Criticism of Delaware Corporate Law Overhaul Amidst Business Concerns

Delaware enacted significant amendments to its corporate laws in March 2025, driven by concerns from business leaders like Elon Musk and recent court rulings perceived as favoring shareholders in conflict-of-interest cases. Passed rapidly within two weeks, the legislation aims to protect Delaware's status as the leading corporate domicile by bolstering legal protections for corporate officers and controlling stockholders against shareholder lawsuits and limiting the scope of document discovery during litigation. 

However, Delaware Vice Chancellor J. Travis Laster publicly criticized the overhaul, warning that new definitions (like "controlling stockholder") and limitations introduce "arbitrary bright lines" that could undermine the predictability Delaware law is known for, potentially leading to increased legal uncertainty and litigation as courts interpret these changes. Critics worry these changes favor insiders and hinder shareholder accountability. 

Source: AP News