Delaware Legislature Approves Bill to Limit Shareholder Lawsuits

Senate Bill 21, aimed at preserving Delaware's corporate dominance, now awaits Governor Matt Meyer's signature amid criticism from investor advocates.

• Delaware lawmakers passed Senate Bill 21, a measure designed to restrict shareholder lawsuits against controlling shareholders, in a 32-7 House vote following unanimous Senate approval.
• The bill seeks to protect Delaware's $2.2 billion in annual corporate revenue and maintain its status as a leading corporate hub, home to two-thirds of Fortune 500 companies.
• Critics, including shareholders' lawyers and governance experts, argue the legislation favors corporate insiders and undermines investor protections.
• The bill was fast-tracked through the legislature within two weeks, with support from Governor Matt Meyer and top corporate law firms, despite concerns about rushed decision-making.
• Legal challenges are anticipated following the bill's enactment, potentially reshaping Delaware's corporate legal framework and its reputation for judicial discretion.

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The Philadelphia Inquirer