Delaware
Controversial corporate law changes passed by House, signed by Delaware governor
What to know about jury duty in Delaware
Here are some tips and information about what to do when you receive a jury summons in the mail in Delaware.
The Delaware House of Representatives on Tuesday night overwhelmingly passed a controversial rework of the state’s corporate code.
Delaware’s corporate laws govern the management of most of the nation’s top corporations, and the amendments passed by the legislature Tuesday will make it harder for shareholders to sue companies’ most powerful leaders for self-dealing and transactions that include conflicts of interest.
The overhaul has been the most controversial initiative in this year’s General Assembly, seeing debate from national media headlines to mail sent to everyday Delawareans.
The bill has been championed by new Gov. Matt Meyer as well as Democratic leaders in the General Assembly. They say the changes are a necessary course correction that will give corporations’ most powerful managers more predictability and consistency as they consider business transactions.
To justify the change, proponents have argued that the future of Delaware is at stake, forecasting an exodus of business activity that underpins the state’s relatively low taxes, lack of sales tax and funds more than a quarter of state government annual expenses.
Meyer swiftly signed the bill after its House passage Tuesday night, saying in a press release the bill would “protect state revenue” that funds all aspects of local government.
Critics, which include corporate law academics, institutional investors and attorneys that represent shareholders, contend that doomsday prophecies about an exodus of companies and corresponding loss of state revenue are a mirage created to justify what one attorney described as a “nakedly corrupt hand-out to billionaires.”
They argued the changes would handcuff the ability of Delaware’s famous Chancery Court to police deals involving conflicts of interest, ultimately giving influential business leaders greater leverage to benefit themselves at the expense of pensioners, retirees and ordinary investors.
In sum, this will detract from Delaware’s status as the premier place to charter a business, critics argued, and lead businesses away from Delaware.
“I think it risks the future of the franchise. It risks federal intervention,” said Democratic state Rep. Madinah Wilson-Anton. “That would be, in fact, cooking that golden goose.”
The House hearing capped a month of debate that resembled national debates over the power and influence individual business leaders and billionaires have over the mechanics of government.
During Tuesday’s hearing, opponents unsuccessfully introduced several amendments aimed at bolstering protections for investors, as well as preventing the bill from undercutting ongoing shareholder investigations into potential past misdeeds by powerful individuals at companies like Meta − Facebook and Instagram’s parent company.
What the bill does
Delaware is the legal home to some 2 million corporations, about 60% of those in the Fortune 500. The corporate laws on the state’s books, in turn, govern the rules by which the nation’s largest corporations govern themselves.
When shareholders feel they’ve been taken advantage of by powerful people within companies, they take those claims to the Delaware Chancery Court, which serves as a check on mismanagement. Its speed, consistency and judicial expertise in evaluating such claims is said to be one reason Delaware is the primary place to charter a business.
Previously: Controversial Delaware corporate law overhaul passed by Senate, heads to state House
The law passed Tuesday deals specifically with how Chancery Court can police deals cut by a company’s most powerful shareholders, like Mark Zuckerberg of Meta, when there is a conflict of interest. These individuals are referred to in the law as “controlling stockholder” or “director.”
The changes amend how a controlling stockholder is defined, lower the hurdles they must jump through to execute a potentially conflicted transaction, and curtail information available in so-called “books and records” requests. These requests are used by aggrieved shareholders to obtain documents, files, meeting minutes and communications to investigate their claims.
Attorneys involved in drafting the legislation say that over the years, the legal definitions of controlling stockholders, what books and records are, and other concepts affected by the legislation have been expanded by Chancery Court rulings. This has caused uncertainty when business managers are evaluating potential company transactions.
The sentiment is that Delaware feels “less predictable, less stable, less business friendly” and that there is a “much more litigious environment,” said Amy L. Simmerman, partner at Delaware firm Wilson Sonsini and advocate of the bill, at a House committee hearing last week.
This has caused more companies she counsels to question their future in Delaware, she said.
So the purpose of this legislation is to provide more predictability and balance where recent court decisions have caused confusion, said Lawrence Hamermesh, a corporate law expert who helped draft the bill.
But opponents have argued the legislation will reduce the role of Chancery Court policing bad transactions, overturn decades of court precedent and allow controlling shareholders greater leverage to engage in conflicted company transactions at the expense of other shareholders.
It will also further the idea that powerful business people can simply turn to a pliable state legislature for relief when they don’t agree with a Chancery Court decision, opponents said.
Amendments fail on House floor
Multiple amendments debated on the House floor Tuesday were aimed at preserving aspects of Delaware case law that Wilson-Anton, author of those amendments, argued would continue to provide protections for investors.
“We are dealing in dangerous territory,” Wilson-Anton said.
Each failed after they were labeled as “unfriendly” by the bill’s House sponsor.
Another amendment would have made the proposed changes apply only if individual companies’ shareholders voted to adopt the changes.
Democratic state Rep. Sophie Phillips, the amendment’s sponsor, told legislators the bill has generated a “bad look for our state” and that the amendment would reflect a “compromise.”
Robert Jackson, a law professor at New York University and former commissioner of the U.S. Securities and Exchange Commission, was called as a witness by Phillips.
He argued that without amendment, the bill changes law that has worked well for many Delaware-chartered companies for decades. An opt-in provision would give companies the flexibility to tailor the law to their needs or not, a hallmark of other aspects of the state’s corporate code, he said.
Democratic state Rep. Krista Griffith, the bill’s sponsor in the House, argued the amendment would impose a “tremendous amount of work” for companies to opt into the new rules, nullifying the purpose of the bill. Jackson countered that opting into the rules would carry the same process as reincorporating outside of Delaware and without the downsides that come with such a move.
Jackson’s testimony was ultimately cut off by House Speaker Melissa Minor-Brown, who accused him of speaking too much about the bill itself and not the amendment, which ultimately failed.
Questions over motive for corporate law changes
Another amendment was aimed at criticisms thrown at the General Assembly about motive.
Absent data showing any exodus of Delaware companies is afoot, opponents have argued the changes are actually at the behest of a few powerful business leaders like Zuckerberg at Meta.
In February, news leaked to the Wall Street Journal that Meta was considering leaving Delaware. Shortly after, tech company Dropbox and Pershing Square Capital Management, an investment firm, made similar rumblings.
Secretary of State Charuni Patibanda-Sanchez has said these rumblings began the conversation that led to the legislation.
Public records first reported by CNBC showed a Saturday meeting organized by the Meyer administration with state legislators and corporate attorneys the day after the Meta leak was published and then a meeting with Meyer and Meta officials organized for the following day.
Over the subsequent weeks, the bill was drafted by Hamermesh, also an attorney at Richards, Layton & Finger, as well as former Chief Justice of the Delaware Supreme Court Leo Strine Jr. and former Court of Chancery Chancellor William Chandler III, both of whom now work for firms that typically defend against shareholder lawsuits.
On the House floor Thursday, Rep. Frank Burns noted he was aware of two pending shareholder investigations into Meta that could become lawsuits and could be undercut by the changes.
Mounting criticism: Attorneys, academics criticize proposed corporate law changes at hearing
The change passed by legislators Tuesday would apply to any previous company transactions that are not subject to any lawsuit or court ruling as of February, potentially undercutting any lawsuit that flows from a current investigation into past transactions.
“The last thing that Delaware should have is the impression that by passing this law, we intervened in some way that may have benefited some company,” Burns said, presenting an amendment that would make the new rules only apply to transactions occurring after the bill’s passage.
Griffiths, the bill’s House sponsor, also described this amendment as “unfriendly” and argued it would cause confusion and go against the point of the bill: to make things “clearer for corporations.”
Burns replied that it would be less confusing and more fair to have past transactions governed by the law in effect at the time and future transactions governed by the new law.
This would be more “honorable and clean,” and “takes us out of being accused of having done something that would intervene in some ongoing investigation,” he said.
That amendment also failed.
Contact Xerxes Wilson at (302) 324-2787 or xwilson@delawareonline.com.
Debate on the bill
Slithery intruder makes appearance on beach
A huge snake was spotted making its way across the beach in Ocean City, Maryland. Luckily, the reptile was not venomous.
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.
Del lawmakers discuss bill requiring teachers work with valid licenses
The bill is a response to revelations a school therapist fabricated his credentials before he was charged with sexual abuse of a child.
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
What to know about jury duty in Delaware
Here are some tips and information about what to do when you receive a jury summons in the mail in Delaware.
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.
-
New York48 minutes agoMan Dies in Subway Attack; Mamdani Orders Inquiry Into Suspect’s Release From Bellevue
-
Detroit, MI1 hour agoPatchy dense fog turns to stronger thunderstorms for Metro Detroit to start the weekend
-
San Francisco, CA2 hours agoWhere to watch Pittsburgh Pirates vs San Francisco Giants: TV channel, start time, streaming for May 9
-
Dallas, TX2 hours agoFC Dallas vs Real Salt Lake Preview: Lineups, Storylines & What to Watch
-
Miami, FL2 hours agoMiami Area Gets First New Manufactured Home Community in Decades
-
Boston, MA2 hours agoWhat we know about wrong-way driver killed in head-on collision with state trooper in Lynnfield – The Boston Globe
-
Denver, CO2 hours agoA Frontier plane hits a pedestrian during takeoff at Denver airport
-
Seattle, WA2 hours ago
Where to watch Seattle Mariners vs Chicago White Sox: TV channel, start time, streaming for May 9