OPINION
Senate Bill 21 Passes in Effort to Bring “Clarity and Balance to Delaware Courts and Corporations
Dear Friends,
Senate Bill 21 passed. The bill should bring “clarity and balance” back to Delaware corporate laws
Senate Majority Leader Bryan Townsend — a Democrat from Newark and a career attorney who handles Delaware corporate litigation — told Delaware Public Media that “recent court decisions have effectively muddied some key aspects of Delaware’s legal franchise.”
Townsend said this bill addresses “growing frustration” about the “departure in predictability’ in Delaware’s courts.” Delaware’s SB21 will try to repair the damage done by Andre Bouchard, Leo Strine and current Chancery Court Chancellor Kathaleen McCormick. Many companies have left as more are considering leaving Delaware. In response to that, Townsend is trying to bring back “predictability” to our Chancery Court, which has been ripe for changes.
See the story below for more and let me know your thoughts on this folks. It is always welcome and appreciated.
Respectfully Yours,
JUDSON Bennett–Coastal Network
Delaware Senate Passes Controversial Senate Bill 21
DOVER, DE- The Delaware Senate unanimously passed Senate Bill 21 on Thursday, a controversial measure that has sparked heated discussions inside Legislative Hall.
Senate Bill 21 seeks to change how business deals between company leaders and major shareholders are handled in the state.
State Senator Brian Pettyjohn, a Republican from District 19, explained the bill’s purpose, noting it aims to address concerns about the balance of power in corporate governance.
“Senate Bill 21 is introduced really as a result of the perception that Delaware corporate law has become unbalanced, more in favor of shareholder groups versus the board of directors that govern the company.”
Delaware, known as the corporate capital of the U.S., is home to over 2 million entities, with many of them choosing to incorporate in the state due to its favorable laws.
Pettyjohn argues that maintaining this business-friendly environment is critical for the state’s economy.
“Losing the corporate franchise dollar would be devastating to our state’s economy. It could lead to things we don’t want, like a sales tax or statewide property taxes.”
While the bill has garnered support, it has also faced opposition. Critics argue that it grants too much power to corporate boards over shareholders.
However, supporters, including Senator Trey Paradee, a Democrat from District 17, contend that the bill simply codifies a longstanding practice in Delaware.
“I think the bill really just codifies a practice that Delaware has always maintained, honestly. And it’s really about striking a balance between corporations and shareholders.”
Pettyjohn emphasized that these changes will bring stability to the state’s business climate, helping ensure companies continue to operate in Delaware.
“Corporations love stability. They love predictability. And as long as they know that we’re stabilizing the waters here in Delaware, we’re calming the rough seas, they will be more inclined to stay here in Delaware versus looking for other states.”
Senate Bill 21 now moves from the Senate to the House for further discussion and a vote.