Good day all. One of the things the State of Delaware is noted for, besides foisting the worst president in American history on us, is the number of businesses that incorporate in the State. The reason for this is the business friendly laws they have. This all changed recently, when a politically motivated judge decided that Elon Musk was making to much in compensation.
I won’t bother going into all the ins and outs of that decision. The short version is a bunch of activists, angry at Elon Musk for supporting things like free speech and President Trump, decided to hit him in the wallet. They sued saying that his salary agreement was to much and it should be revoked. A progressive liberal Democrat Musk hating judge agreed and stripped Musk of his pay package.
This sent shockwaves through the business community. What happened next should have been apparent to everyone. Elon Musk closed out all his businesses incorporated in Delaware and reincorporated them in different states. (I think Texas but I haven’t bothered to look) This started a conga line of major corporations deciding that Delaware was no longer a safe haven. A number of major corporations have either moved to different states or are about to. One of these is Walmart. Here are the details from Newsmax:
Walmart is among the latest and biggest companies considering leaving Delaware as its location of incorporation. A small group of corporate attorneys last month told Delaware legislators that blue-chip companies including Walmart were considering moving their corporate legal residences out of the state, Semafor reported.
This is going to be a major hit to Delaware’s bottom line. As I understand it, corporations pay taxes in the states they’re incorporated in. If a corporation moves out, all the revenues that would have been generated for the state go away. Walmart leaving is going to really hurt the state’s budget.
The news is said to have Delaware’s political and business leaders reeling.
The small state of Delaware with just over 1 million people derives more than one-third of its state budget from corporate legal fees, not to mention the far greater impact corporation business has on the economy.
This was all due to the original idea that incorporating in Delaware would be a net positive for a company and it was for the longest time. Then the Progressive Liberal Communist Democrats took control of the state.
But now, many businesses are fleeing the state due to its woke policies, left-leaning judges and anti-business environment.
Billionaire Elon Musk began the corporate stampede when he moved multiple companies out of Delaware, including Tesla, SpaceX and Neuralink.
The move came after Delaware Chancellor Judge Kathaleen McCormick, a Democrat, ordered Musk to give up a compensation package valued at $55.8 billion, though it was twice approved by shareholders.
Silly shareholders, thinking that they actually have any say in how a corporation is run.
The ruling followed McCormick’s January 2024 decision that called the Musk pay package excessive and rescinded it. The move surprised investors and cast uncertainty of the state’s long-held position as a neutral corporate arbiter.
What uncertainty? Thanks to that Marxist Judge, Delaware is no longer considered a safe haven. I actually looked up Kathaleen McCormick. (That is the correct spelling of her first name) She has ruled repeatedly against Elon Musk. She issued the ruling that Musk had to buy Twitter after he saw how overvalued it was, (I bet she’s regretting THAT decision now), and decided that she knew best how much a CEO should be paid.
Despite painting Musk’s compensation as greedy, McCormick did award the trial lawyers who sued Musk a staggering $345 million for their legal filings.
I wonder how much she got back under the table? To make that idiotic of a decision, she must have been “compensated” in some way. The alternative is that she is manifestly incompetent and needs to be removed from the bench. I actually used Twitter(X)’s Grok to find out how a judge is removed. I suspect this is something that Elon Musk actually wanted to know.
At issue for Musk, Fortune 500 CEOs and entrepreneurs across the U.S. is that the Delaware Court of Chancery has become a haven for shareholder lawsuits and left-wing judicial activism.
Musk, when this Marxist bimbo decided she was smarter than the shareholders, posted his unhappiness on Twitter(X).
Musk was not happy with McCormick’s ruling and took to X, writing, “Shareholders should control company votes, not judges.”
Another Musk repost stated: “Things to do in Delaware: 1) Leave.”
Which he is doing and also taking all his money with him. Elon Musk has also urged other corporations to leave Delaware and reincorporate almost anywhere else. (I doubt that Kalifornistan is going to see a large increase in companies incorporating there) A number of other companies are doing just that.
There are indications the number of companies departing the state has grown significantly, while many new companies are not opting to incorporate there.
Delaware, like all Democrat controlled blue states, has gone pretty much Communist Totalitarian and now considers free enterprise, capitalism and big business, (Actually all business these days), as bad and something that needs to be put under absolute control by the State.
In 2023, The Wall Street Journal published an article, co-authored by former Attorney General William Barr, lambasting Delaware for embracing far-left DEI, environmental, social, and governance policies and attempting to force them on corporations.
Aside from the racism inherent in DEI, the state issuing orders to corporations to comply or else is right out of the Fascist playbook. (So much for their claims about being anti-fascist)
Others have pointed to the Delaware Court’s actions that forced Fox News into an unheard-of $787 million settlement with a voting company over its reports relating to the 2020 election.
Part of that settlement was a desire by Fox management, which is now very left wing, to clear the books, so to speak. Other news agencies were also sued for the same reporting and to my knowledge, refused to settle. (This is from memory, but I think Newsmax was one and the plaintiff dropped the suit when it started going to discovery. I may be mistaken here, but that’s what the comments section is for)
Viet Dinh, Fox’s chief legal officer, said the Delaware court’s rulings “called into question the fundamental fairness and integrity of the Delaware civil justice system.”
Justice in Delaware is basically dead. Thanks to that blithering incompetent idiot McCormick, the entire state will soon fall into full on economic collapse. With Meta and Walmart leaving or planning to leave, you can bet that all the other big corporations will be pulling out in the next few years. They can see the writing on the wall, and their shareholders will demand it.
States like Texas and Florida are quickly adapting to replace Delaware as states that make it easy and worth the hassle of dis-incorporating and reincorporating in a new state. It will be just another nail in the coffin of the Progressive Liberal Totalitarian movement. In the past, these states could look to Washington to bail them out. Now that money is drying up as well. It’s time to sit back and enjoy the collapse.
Thatisall
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