Those who keep wide-awake and Del-aware know that the last few General Assembly sessions have brought controversial reforms to the Delaware General Corporation Law (DGCL). These revisions to the corporate code (SB 313; SB 21) overruled state court decisions that had offended powerful billionaires, stripping away protections that Delaware law had once offered to regular shareholders against the whims of corporate “controllers.”
While the process of “revising” corporate law in Delaware has long been suspended between tragedy and farce, these recent sessions featured elected officials in Dover working hastily, and engaging in dramatic, emotional confrontations with opponents. Leading lawmakers’ ill-tempered panic sprang from their conviction that a mass exit of firms from Delaware – “DExit” – was imminent. Repeatedly prophesied by tech financiers and corporate defense lawyers, if such a tsunami of departures were to occur, it could cost the state a quarter of its annual revenues, devastating government operations. So in an effort to appease the fussy gods of Silicon Valley and keep the state’s budget intact, Delaware’s leaders have inaugurated a quirky new tradition where they loudly and publicly sacrifice investors’ rights and the state’s sovereign self-respect on a boardroom altar.
The results of this statutory self-mortification are hard to assess. On the one hand, businesses domiciled in Delaware do not appear to have fled the state in any great number; data are scant, but a stampede toward “DExit” does not appear to have materialized.
However, since the last legislative session closed in June, the lords of concentrated capital remain unsatisfied. If anything, under the aegis of Trump II: The Reckoning, the robber baron brigade has amped up its campaign against the First State. (One leading VC firm even found time between raids on the federal government’s datastores to follow through on a threat to re-incorporate its never-incorporated limited liability company in a friendlier regime offering a more acceptable non-incorporation status: Nevada). While the spark of “DExit” hasn’t caught fire, the arsonists striking matches for it are still trying their best to roast Blue Hens alive.
All of which raises a critical question for the coming legislative session: If the oligarchs are still unhappy, and the state’s dependence on franchise revenues remains as deep as ever, then what new legal freaks might Delawareans expect to see when legislators flock back to Dover?
Your humble country correspondent is, alas, not privy to any billionaire WhatsApp groups, Big Law Slack chats, or country club chin wags. But the public statements of powerful people suggest that we’re going to get more of the same, good and hard. If Delaware’s lawmakers hearken, once again, to the siren call of Grok-sodden oligarchs and their well-paid lawyers, the state will make its law even cozier for distant corporate autocrats – and further insulate its government from the real human citizens closer by.
The clearest and most public sign of what’s to come came in the form of a speech delivered by the Chair of the Securities and Exchange Commission, Paul Atkins, at the “John L. Weinberg Center for Corporate Governance’s 25th Anniversary Gala,” held at the University of Delaware on October 9, 2025. An experienced Republican official with close ties to the crypto industry, Atkins used his dinnertime speaking slot to explain the policy framework he favors as head of the nation’s premier financial market regulator – and to demand legal changes from Delaware.
His speech is worth attending to, in part because Atkins laid out a blueprint for state lawmakers. Equally important, the venue for Atkins’s appearance, as well as his reception, indicate an evolution in how corporate interests are served in Delaware – and the wider stakes of that hospitality.
Atkins’s SEC has been in the news recently for how quickly it has shut down investigations into the Trump family’s business partners. But back in October, the SEC chair stated that his goal at the agency was to “Make IPOs Great Again.” To counter increasing private financial market activity, Atkins wants to increase the number of corporations listing their shares for sale on the public markets his agency (in theory) regulates. To do so, Atkins claimed, “we must” reduce disclosure requirements, “de-politicize shareholder meetings,” and “reform the litigation landscape” to eliminate “frivolous complaints.”
Some of these policies, in Atkins’s view, require “reform” at the state level. While the SEC can handle watering down disclosure rules itself, state law governs what kind of proposals can be brought to shareholder meetings. From Atkins’s perspective, those meetings have become too “politicized” by so-called “precatory proposals,” non-binding resolutions that shareholders can use to express their preferences for corporate policy. While these measures constrain corporate managers only rhetorically – they are less tools of “shareholder democracy” than “shareholder venting” – for Atkins and his political allies, even the slight influence of this kind of stockholder speech is, apparently, an intolerable burden. And so in his dinner talk, Atkins laid out how he plans to ignore normal SEC processes, and instead petition Delaware courts for an opinion that would restrict investors’ rights to offer proposals for stockholder meeting votes.
Atkins also took aim at a different corporate code reform, SB 95, that protects shareholders’ ability to contest corporate managers’ decisions in the courts. By prohibiting “fee shifting” and “mandatory arbitration,” Delaware’s legislature, he argued, “seems to embrace the litigation costs that abusive lawsuits impose.” Invoking the threat of both DExit and overt federal interference, Atkins expressed a “hope” that Delaware would repeal these restrictions.
Winding down his harangue, Atkins deplored how the forces of investor lawsuits and stockholder proposals, “have eroded American competitiveness; locked retail investors out of many of the most dynamic companies; and pushed entrepreneurs to seek capital elsewhere.” Addressing the gala’s attendees, including state court judges and leading state legislators, Atkins noted that the “chance to reverse these trends is well within your reach” – if only his audience would renew their “commitment to the principles that made the U.S. capital markets exceptional.”
In short, the president’s handpicked SEC chair came to dinner in Delaware to demand, first, that the state’s courts limit stockholders’ rights to offer and vote on corporate policy proposals, and second, that the state’s legislature repeal laws that make it possible for stockholders to contest management decisions with litigation. It’s a remarkably clear plan for action – action that would make corporate governance even more autocratic than it already is.
But will Delaware lawmakers do as they are told?
If they do, they won’t be able to say Atkins’s diktats went unrecognized for what they are. Though his speech was laden with jargon and larded with footnotes to recent and conveniently supportive law review articles, outside observers immediately understood his message. Bloomberg reporter Mike Leonard described Atkins’s remarks as “A Warning to Delaware,” and noted that while his “tone was collegial,” it was “hard to miss the unstated ‘or else.’ ” The Interfaith Center on Corporate Responsibility, a “values-based” investors’ group, declared Atkins’s proposal a “a radical and short-sighted departure from more than 80 years of precedent” that would “undermine investor protections.” Similarly, the CEO of Shareholder Association for Research and Education (SHARE) declared Atkins “not just wrong on process,” but “also wrong on the facts,” and argued his proposal “hands corporate lawyers the keys to decide whether corporate management has to answer to its shareholders or not.” In less strident terms, a group of corporate law experts poured cold water on Atkins’s core claims (and those of his recent, conveniently supportive sources), arguing that he “has it backwards” when it comes to statute and precedence. Far from being subject to bans on stockholder proposals, these experts claim, the weight of law empowers stockholders with a responsibility to advise corporate boards of directors – and indeed, the exercise of these rights is a “necessary component of corporate governance.”
Beyond the specific policies, the stakes of Atkins’s demand performance are worthy of note.
As Delaware’s other recent DGCL “reforms” have been, Atkins’ demands are fundamentally hostile to shareholders. Contrary to the well-established Friedmanite rhetoric of Delaware lawyers and judges, Atkins envisions corporations not as bodies that exist to increase the wealth of stockholders, but rather as tools that benefit “controllers” – the managers or minority investors who, by dint of their official position or ownership of special classes of stock, hold hegemonic power over a business organization. In seeking to eliminate not just stockholder power, but also stockholder voice, Atkins and his allies are furthering what Ann Lipton has termed the “authoritarian view of the corporation.” It’s a monarchical vision fully in line with the White House’s extractive approach to Big Business, and one that Delaware’s rivals in the corporate chartermongering game – and especially Texas – have already embraced.
When they meet again in Dover this session, Delaware’s legislators face a real problem. Decades of dependence on corporate franchise revenues have accustomed the state, and its voters, to government on the cheap; and in an economy already primed for recession, that’s dangerous. Worse, state leaders’ history of servility has undermined their ability to resist oligarchs’ demands. As former Weinberg Center Director Charles Elson has observed, SB 21 demonstrated that spending a little money will let you “overturn a Delaware court decision” – and between that legislation, and the Delaware Supreme Court’s subsequent Musk-friendly judgement, the state’s claims to offer balanced law or objective expertise have been revealed to be merely marketing. So why would any robber baron consider Delaware’s government anything but a kept pet?
In that light, it seems clear that the question for the coming General Assembly session is not whether Delaware legislators will bend to meet the will of outside oligarchs, but how far – and what else will break, as a result, when they do.