In a recent New York Times article, “The Long Reach of Delaware’s Corporate Influence,” Steven Davidoff Solomon writes about how Delaware’s courts have changed how deals are done, “setting and changing the rules by which deal makers play.”
Solomon writes:
Delaware casts an enormous shadow over deals because more than 60 percent of public companies are incorporated there. This critical mass means that Delaware decides how companies are governed and is so prominent that its decisions on corporate law influence how other state courts act.
Technical.ly Delaware has also explored the topic of why so many companies incorporate in Delaware. Registered business entities actually outnumber residents.
The New York Times reports that the federal government’s regulator of the securities markets — the Securities and Exchange Commission — doesn’t seem to be interested in regulating the state’s deals.
“Delaware judges are now exercising this power with a vengeance to impose their worldview of deal-making,” Solomon writes.
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