Delaware

Companies continue to consider reincorporation. Does this mean trouble for Delaware?

Published

1 year ago

April 24, 2025

Companies continue to consider reincorporation. Does this mean trouble for Delaware?

Another company has threatened to move its legal headquarters out of Delaware, even after sweeping corporate law changes were made to protect corporate directors.

Eighty percent of all publicly traded companies come to Delaware for its judicial expertise in business dealings and corporate-friendly tax code, but is a mass exodus really upon the state?

Here’s what to know.

Affirm Holdings considers reincorporation

According to GuruFocus, financial technology company Affirm Holdings is reportedly contemplating reincorporating its business from Delaware to either Nevada or Texas.

The company’s CEO, Max Levchin, co-founded PayPal and worked with Elon Musk, whose publicly aired disagreements with Delaware’s Court of Chancery attemped to fuel a movement for corporations to leave Delaware.

In recent months, a number of other companies have expressed interest in moving legal headquarters from Delaware to states like Nevada.

AMC Networks, which owns and operates the AMC cable channel, as well as Madison Square Garden’s Entertainment company cited the increasing franchise tax obligations and uncertainty in judiciary rulings as drivers for reincorporation.

“By re-domesticating the company from Delaware to Nevada, we believe we will be better suited to take advantage of business opportunities and that Nevada law can better provide for our ever-changing business needs and lower our ongoing administrative expenses,” AMC Networks’ proxy statement says.

Other companies like DropBox and Roblox also are in the process of reincorporating to Nevada. Walmart and Meta, which owns Facebook, have reportedly expressed similar desires to leave Delaware, but no progress has been made on their fronts.

What started this pattern?

Delaware’s corporate laws, usually precedented by Delaware Court of Chancery’s rulings, dictate how controlling stockholders or Delaware-incorporated companies can cut deals. The speed and expertise of the court is one of the primary reasons companies choose to incorporate in Delaware in the first place.

“Delaware has been famous for its corporate law and its appeal to companies because you could pretty much always count on it doing a very sensible and balanced thing, even if it wasn’t the thing you wish they would have done,” said Larry Cunningham, , director of the University of Delaware’s Weinberg Center for Corporate Governance. Over the past couple of years, there’s been some debate about if that’s still true.”

The debate in question became inflated after December 2024, when a Delaware Chancery Court judge ruled Tesla CEO Elon Musk’s $56 billion pay package invalid for the second time. The decision sparked Musk to take to social media advising other businesses not to incorporate in Delaware. The ruling against Musk has since been appealed to the Delaware Supreme Court.

A few months later, the Delaware Supreme Court issued a decision in a case within Match Group Inc, which essentially stated that certain protocols must be taken before an “interested transaction,” that is one that involves a controlling shareholder with a potential conflict of interest, takes place.

This court decision was viewed by many companies with controlling shareholders as a catalyst of distrust in Delaware’s Court of Chancery, proof that the judiciary was not as reliable as it had long been perceived to be.

Since the Match decision, a number of companies have threatened to reincorporate from Delaware to other states, in a mass exodus that became known as ‘’DExit.”

The DExit scare led legislators and Gov. Matt Meyer to pass Senate Bill 21, essentially meant to reverse the Match decision by protecting directors and controlling stockholders in order to coax businesses to remain in the First State.

Senate Bill 21 was passed nearly unanimously and quickly signed by Meyer in March, but was not without controversy.

Email correspondence made available via Freedom of Information Act Request and a report from CNBC found that representatives for companies like Meta and Elon Musk’s legal team were involved in the bill’s drafting.

Supporters of the bill said the changes are a necessary course correction that will give corporations’ most powerful managers more predictability and consistency as they consider business transactions.

Opponents argued that the bill would hinder the Chancery Court’s ability to rule over conflicts of interest, allowing business leaders to benefit themselves at the expense of pensioners, retirees and ordinary investors.

Is ‘DExit’ a real threat?

Did SB21 fail in its intention to keep corporations in Delaware? The short answer is no, but it may be too soon to tell.

No matter the political and judicial landscape, one pattern has remained the same – companies leave Delaware every year. While exact numbers are hard to track, it’s generally safe to say that companies incorporated in Delaware far exceed companies that don’t.

“No single factor is going to decide what’s best for a company in terms of where to incorporate it,” said Cunningham. “I wouldn’t have expected [SB21] to promptly change any major decisions. It may have played some role, but it could be one in dozens of factors.”

During a Joint Finance Committee Hearing on Feb. 13, Delaware’s Department of State showed that over 80% of IPOs (initial public offerings) are incorporated in Delaware.

According to the presentation, the corporate landscape propped up by Delaware’s Division of Corporations, Courts and General Assembly generated around $2 billion in revenue for the state in 2024 from around 2 million entities incorporated in the state.

A number of the publicly available proxy documents that spell out reasons for leaving Delaware cite increasing franchise tax obligations in the state.

According to the Delaware Division of Revenue, all corporations incorporated in the state have a maximum tax of $200,000 and “large corporate filers” have a tax capped at $250,000. So, even trillion-dollar-companies like Meta pay a maximum of $250,000 in franchise taxes to Delaware – a price that more companies are citing as too high to stay in Delaware.

In terms of the “judicial uncertainty” referenced by many of the corporations threatening to re-incorporate, Cunningham believes the “drama may be overdone.”

“It’s true that businesspeople value certainty when making decisions,” Cunningham said. “I have not detected the pattern that is being described.”

Molly McVety covers community and environmental issues around Delaware. Contact her at mmcvety@delawareonline.com. Follow her on Twitter @mollymcvety.

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Delaware

Snake-infested lakes and ponds in Delaware. What to know before you go

Published

3 hours ago

May 9, 2026

Press Room

Snake-infested lakes and ponds in Delaware. What to know before you go

It could be one of your worst nightmares.

You’re enjoying a summer day in the water when you feel something brush past your leg. You turn, and there’s a snake.

While the chances of that scenario playing out are highly unlikely, there is a good chance the waters you enjoy playing in are also inhabited by snakes.

The danger level might not be as high as Florida’s, but it’s still something to be aware of when you go into the outdoors.

Here’s a look at the snake-infested lakes and ponds in Delaware, according to worldatlas.com.

Nanticoke River

The Nanticoke River runs 64 miles from southern Delaware to the Chesapeake Bay, winding through marshlands, forests, and farmland along the way. The habitat is perfect for the Northern watersnake. The snakes are nonvenomous, but they will defensively strike if you corner them or try to hold them.

The Brandywine

This is where you need to be very careful. The Eastern copperhead is a confirmed and documented presence, and a small group exists at Alapocas Run State Park along the water near Wilmington. The snakes won’t chase you, but if you step too close or don’t see them, they will strike. You should watch your step near log piles and rocky outcrops.

Millsboro Pond

Millsboro Pond is the home to perch, black crappie and frogs, which is the perfect food for snakes including northern water snakes, plain-bellied water snakes, queen snakes and common ribbon snakes.

The Eastern copperhead lives in southern Sussex County, which includes the pond. However, sightings are rare. It’s something to watch out for when you are at the pond.

Lums Pond

The pond, located in Lums Pond State Park, has numerous varieties of snakes. However, the inlets and small islands are perfect for northern water snakes to bask in the sun. The snakes thrive on fish and amphibians and benefit from the surrounding forest and wetlands.

One snake to watch for is the ringneck snake. It has a mild venom and its teeth have trouble puncturing human skin, but for those with venom allergies, you should treat it like any other venomous species.

Trap Pond

Trap Pond, located in Trap Pond State Park, is noted for its cypress swamp. The bald cypress trees and the tree’s root structure provide a great hiding place and basking spot for eastern garter snakes and northern water snakes.

Silver Lake

Located in Dover, Silver Lake is lined with trees and vegetation, making it a great place for snakes. The northern water snake is seen here, but eastern kingsnakes are also occasionally seen in the wooded areas of the lake.

Garrison Lake

Garrison Lake is a popular spot in Kent County for fishing and boating. The marshy areas and dense vegetation are perfect habitats for northern water snakes, eastern garter snakes and eastern rat snakes. The wetlands are attractive to snakes due to the abundance of prey and the availability of cover.

Red Mills Pond

Red Mills Pond, located near Lewes, has a rich biodiversity supporting numerous amphibians and small mammals, which attract snakes. Among the snakes you may see in and around the pond are the northern water snake, eastern ribbon snake and eastern ribbon snake.

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Delaware

Delaware Online wins investigative reporting prize, 17 other awards

Published

15 hours ago

May 8, 2026

Press Room

Delaware Online wins investigative reporting prize, 17 other awards

Delaware Online/The News Journal won the A-Mark Prize for Investigative Journalism for its reporting revealing hundreds of invalid teacher licenses in Delaware.

The work by reporters Kelly Powers and Esteban Parra led to lawmakers proposing a bill that would tighten licensing requirements for public school employees and penalize districts that retain unlicensed staff.

The judges cited the work for “meticulous and thorough reporting” and “a fair and balanced presentation of the situation.”

The A‑Mark prize honors excellence in watchdog and accountability reporting. It is backed by The A‑Mark Foundation, a nonpartisan nonprofit supporting investigative and unbiased social‑issue journalism, in partnership with the Maryland‑Delaware‑DC Press Association.

“The reporting from Kelly Powers and Esteban Parra reflects the very best of investigative journalism in Delaware – thorough, fair and impactful,’’ said Mike Feeley, executive editor of The News Journal and Delaware Online. “We are proud to see their work awarded with the inaugural A-Mark Prize in a highly competitive field.

“I congratulate all of Delaware Online’s award winners in this year’s MDDC Awards for their commitment to journalism that strengthens our communities,’’ Feeley said.

Delaware Online/The News Journal won a total of 18 awards May 8 at the MDDC Press Association’s annual conference.

The MDDC Awards recognizes news publications from Maryland, Delaware and the District of Columbia. For each category, a first- and second-place winner is chosen based on circulation divisions. A part of the largest-circulation division, Delaware Online/The News Journal competes against news sites like the Baltimore Sun, Baltimore Banner and Washington Post.

Here is the list of winners, with links to the stories that took home the prizes.

Best of Show

News-Driven Art or Illustration: Luis Solano, “American’s deadliest habit”

First Place

Second Place

Feature Story: Non-Profile: Xerxes Wilson, “Why this Delaware prison is making tattooing part of its educational programming”
Sports Feature Story: Brandon Holveck, Martin Frank, “Eagles’ Saquon Barkley’s historic season built on selflessness, generational athleticism”
Local Column: Critical Thinking: Xerxes Wilson, “Broken bones, brick walls and searching for accountability”
Sports Photo (Feature): Benjamin Chambers, “Delaware wins 61-31 against UTEP in Conference USA regular season finale”
Public Service Reporting: Krys’tal Griffin, “While these Delaware riders depend on Paratransit, the service still lags post-pandemic”
Breaking News: The News Journal staff, “Delaware State trooper killed by shooter prevented other deaths, state officials say”
News Page Design: Luis Solano, “American’s deadliest habit”
Page 1 Design: Stephanie Lindholm, “Musical haven in Delaware”
Continuing Reporting: Kelly Powers, Shane Brennan, “Your property taxes are changing. What Delaware homeowners should know about new laws”
General Website Excellence, The News Journal

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Delaware

Lawsuit says Delaware prisoners forced to ‘marinate’ in pepper spray

Published

1 day ago

May 8, 2026

Press Room

Lawsuit says Delaware prisoners forced to ‘marinate’ in pepper spray

A lawsuit seeking to represent all people locked up by Delaware claims that prisoners are routinely left to “marinate” in a high-concentration pepper spray.

The lawsuit filed May 7 in Delaware Court of Chancery seeks an injunction barring correction officials from using the spray until leaders enforce rules the lawsuit says require staff to decontaminate prisoners after they are targeted.

In interviews, state prisoners have frequently described officers’ use of so-called OC spray, a more concentrated form of pepper spray only available to law enforcement, as cruel. Prisoners say the spray is deployed unnecessarily, recklessly, frequently and causes intense burning on the skin and through the respiratory system.

“Imagine taking a glass bottle, smashing it up and grinding it up and snorting that up your nose, then times that by 1,000,” said a former prisoner, William Davis, describing being sprayed during a previous interview about a similar use‑of‑force lawsuit involving Sussex Correctional Institution. “I felt it burn for days.”

Records obtained through a Freedom of Information Act request show OC spray — short for oleoresin capsicum — is used hundreds of times a year and is a frequent issue in Delaware prison lawsuits. The new ACLU lawsuit seeks class-action status on behalf of all Delaware prisoners and focuses on what happens after someone is sprayed.

The lawsuit claims officers routinely ignore training, policy and clear health risks by failing to properly flush and clean people after using OC spray. It argues the practice violates Delaware’s constitutional ban on “cruel” punishment.

Prisoners allege they were sprayed while handcuffed, naked or already subdued, including one who said officers sprayed him through his cell door while he was locked inside, and another who said he was forced during a strip search to touch his genitals and then his mouth after being sprayed.

In each of these episodes, the lawsuit states that prisoners were not properly decontaminated, some were left unattended, returned to a contaminated cell, left in clothes drenched in spray and some were not allowed to shower for a day or more after.

“Refusing to decontaminate prisoners is cruel because it subjects them to hours of needless suffering. Prolonged exposure is also potentially deadly,” the lawsuit states.

Delaware Department of Correction officials did not respond to requests for comment.

The allegations of the lawsuit are built partially on declarations from eight named plaintiffs in Delaware prisons. Additionally, it leans on video and deposition evidence from two other excessive force cases the ACLU is litigating on behalf of Delaware prisoners.

In those other cases, several officers have testified in depositions that they had not decontaminated individuals they sprayed and were unaware if others had, the new lawsuit states.

The lawsuit also cites Department of Correction training materials turned over in other lawsuits. Policy and training documents outline that OC spray is only to be used when no reasonable alternative is available, not as retaliation or punishment and in short bursts from a safe distance.

A training presentation describes the health risks of OC spray and says sprayed individuals should be moved to fresh air, assessed for medical conditions and repeatedly flushed and wiped to decontaminate them.

It notes that people who have been sprayed must be monitored. It underscores these instructions with a red skull and crossbones.

Other litigation: New lawsuit claims excessive force used by Delaware officers during September prison raids

In interviews, prisoners have reported that officers would “empty the can” in long bursts directed closely at their face. The named plaintiffs in the new lawsuit include asthmatic individuals who said they were denied their inhaler after being sprayed.

Besides pain, OC spray can cause difficulty breathing, gagging, heart distress and blindness. It can also induce a feeling of suffocation and helplessness, according to a department training presentation. Failure to decontaminate can cause blindness, respiratory failure and skin conditions, the lawsuit states.

If sprayed too close, the OC molecules can cause what’s known as “hydraulic needling of the eyes” where the spray causes lacerations, the complaint states, noting that multiple prisoners in other states have died after being sprayed.

The lawsuit also claims that officers deploy OC spray in numerous ways, which include a grenade, fogger, spray, muzzle blast rounds, as well as pepper balls fired from a weapon similar to a paintball gun.

One of the named plaintiffs was shot numerous times by a pepper ball gun, rupturing the globe of his right eye. A separate lawsuit filed on behalf of that prisoner was dismissed because he didn’t address written complaints about the episode through prescribed channels inside the prison.

Rather than seeking damages for federal constitutional violations, the lawsuit asks only for an injunction forcing changes to decontamination practices. And instead of following the typical federal-court path for prisoner-rights cases, it was filed in Delaware’s Court of Chancery — the state’s business court, where cases tend to move more quickly.

It names Department of Correction Commissioner Terra Taylor as its lone defendant, claiming that the department has knowingly failed to follow its own policy regarding the spray’s use.

It also cites a deposition given by Taylor in other litigation in which she states there is no specific process for decontaminating those targeted with OC, that she hasn’t taken any steps to require officers to do so, and that she doesn’t believe there is an obligation to do so.

Contact Xerxes Wilson at (302) 324-2787 or xwilson@delawareonline.com.

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