Shareholder Primacy Delaware statute amendments
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Apr 2, 2025 Delaware's recent statute amendments are shaking up the landscape for companies and shareholders alike. The hosts delve into how these changes impact corporate governance, particularly for independent directors and conflicts of interest. They discuss the implications for shareholder litigation and the uneasy balance of power between controlling shareholders and minority rights. Humorously, they reflect on the legislative pressures from corporate giants, revealing how big business shapes laws amidst evolving governance challenges.
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SolarCity Acquisition
- Companies often avoid entire fairness trials, even if they might win.
- Tesla's acquisition of SolarCity, despite shareholder concerns about inflated price, was deemed entirely fair by the court.
Outsourcing Independence Standards
- Delaware's new legislation functionally outsources its independence standards to federal law and stock exchanges.
- This is a significant retreat for a state that has historically positioned itself as the expert in corporate governance.
Weakened Shareholder Information
- The revised Delaware statute weakens the information standard for shareholder votes.
- Shareholders might only need to know the economic terms, not the details of deal negotiations.