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Delaware Supreme Court upholds reforms to curb ‘DExit’ concerns

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Delaware Supreme Court upholds reforms to curb ‘DExit’ concerns


This story was produced by Spotlight Delaware as part of a partnership with Delaware Online/The News Journal. For more about Spotlight Delaware, visit www.spotlightdelaware.org.

A Delaware law passed last year in the wake of escalating assaults on the state’s corporate brand shielded powerful company leaders from facing certain lawsuits brought by smaller investors. 

What it didn’t do was violate the Delaware Constitution, the state Supreme Court ruled on Friday, Feb. 27. 

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More than three months after hearing arguments, the justices ruled that the corporate law reform – known as Senate Bill 21 – did not strip Delaware’s prominent Court of Chancery of its constitutional authority to decide when a business deal is fair.

“The General Assembly’s enactment of SB 21 falls within the ‘broad and ample sweep’ of its legislative power,” the justices stated.

The ruling ends a bruising fight in Delaware over when the state’s business court should allow small-time investors to interrogate insider deals struck within companies by founders or other business leaders.

The ruling also averts what could have been an embarrassment for the state’s legal and political establishment had the high court overturned the law. 

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More than a year ago, Tesla CEO Elon Musk — the world’s richest person — was calling on business leaders to move their companies’ legal homes out of Delaware. Musk had launched the campaign, which became known as “DExit,” after a Delaware Chancery Court judge ruled that he could not accept a multibillion-dollar pay package from Tesla.  

Just as the campaign appeared to be gaining a foothold, Gov. Matt Meyer, legislative leaders, and Delaware attorneys who represent corporations threw their collective heft behind SB 21.

They argued then that the legislation amounted to a “course correction” that would bring the state’s business courts back into alignment with rulings from a decade ago. Many also said the bill was needed to pacify executives who were considering following Musk’s calls to move their companies’ legal homes out of Delaware.

In response, a cadre of critics — which included national law professors, pension fund attorneys, and a handful of progressives within the Delaware legislature — derided SB 21 as a “billionaires bill.” 

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Some also argued that the legislation was the latest in a string of recent changes to Delaware corporate law that have shifted the state away from protecting shareholder rights and toward giving greater deference to powerful executives.

Meyer and others SB 21 supporters rejected those characterizations last year. And on Friday, he celebrated the Supreme Court’s ruling.

In a statement, he said the decision affirms that “Delaware is the gold standard locale for global companies to do business.” He also stated that the number of companies that maintain their legal home in Delaware had increased throughout 2025 despite the DExit campaign.

“In short, SB 21 is working, and I’m glad it will continue to be the law,” Meyer said.  

The legal arguments for SB 21

When arguing against SB 21 in front of the Supreme Court last fall, one attorney asserted that the new law removed the Chancery Court’s time-honored and constitutional duty to say what is fair – or equitable – in a business dispute.  

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The attorney, Gregory Varallo, argued that by removing a shareholders’ ability to sue their company, the law reduced what he described as the immutable power of the Court of Chancery to oversee a “complete system of equity.”

During his arguments, Varallo also offered the justices an unusual acknowledgement, stating that he knew that his stance was unpopular — and that he understood “well the pressures on this court.”

The comments were a likely reference to the consensus of big business groups and the state’s political establishment that believed SB 21 was necessary for Delaware to remain the world’s preeminent corporate domicile. 

Following Varallo, Washington, D.C.-based attorney Jonathan C. Bond defended SB 21, in part, by characterizing his opponents arguments as unprecedented. If adopted, he said they would imperil several existing Delaware laws that go back decades. 

He also argued that changing the rules of corporate law – as SB 21 did – “is the same as wiping out jurisdiction merely because it makes some plaintiff’s claims harder.”

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Also arguing in favor of SB 21 during the hearing was William Savitt, an attorney with the  Wachtell, Lipton, Rosen & Katz – among the most prominent corporate law firms in the country.

Last spring, Meyer hired Savitt’s firm to represent the state in the legal defense of SB 21 for a budget rate of $100,000. By comparison, Wachtell Lipton charged Twitter $90 million in 2022 to ferry that company through its arduous, four-month-long acquisition by Elon Musk.

Wachtell’s client list also includes Mark Zuckerberg and other Meta executives and board members, who last summer settled a seven-year-long, multibillion-dollar shareholder lawsuit in the Delaware Chancery Court.

During his arguments on SB 21, Savitt said equity as determined by judges must follow the statutes created by the legislature, and “not displace the law.” 

“No natural reading of the words (of the Delaware Constitution) support plaintiff’s position,” he said. 

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New Castle County Council finally votes on data center regulations

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New Castle County Council finally votes on data center regulations


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  • New Castle County approved data center rules that will not apply to Project Washington.
  • It came after hours of public comment and council compromise.
  • The ordinance restricts water usage and creates buffers between data centers and residential areas.

New Castle County Council approved regulations on the development of data centers Tuesday night.

They won’t apply to the massive proposed data center complex of Project Washington, which continues to fight through state-level objections.

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The County Council meeting was standing room only. The crowd of both construction workers supporting the legislation and community members opposing it spread into the lobby of the Louis Redding City/County Building.

The ordinance requires data centers to have a closed-loop water cooling system to limit its water use and creates a 1,000-foot buffer between data centers and residential areas, with an exception for 500-foot buffers if a development can follow noise regulations. It also defaults to existing county limits on noise and lighting levels.

A unanimously approved amendment from Pike Creek representative Timothy Sheldon clarified that these new regulations count for applications submitted after this gets adopted and approved by County Executive Marcus Henry, unless an existing applicant requests to follow these new regulations.

It passed with 12 ‘yes’ votes, with Councilmember Jea P. Street absent from the vote itself.

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This was the only amendment left standing. An amendment from Janet Kilpatrick, representing Hockessin, would have grandfathered existing data centers from the ordinance, clarifying that any pending proposal in the county wouldn’t be affected. Another amendment, from Claymont representative John Cartier, would’ve made the ordinance retroactive to count for Project Washington and others. Both were withdrawn at the meeting in a council compromise.

Project Washington’s plans north of Delaware City kicked local data center dialogue into high gear in 2025. The data center project would include 11 two-story data center buildings surrounded by electrical fields on two large land parcels accessible by Hamburg Road, Governor Lea Road and River Road.

It would be 6 million square feet of data center running 24 hours a day, seven days week.

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The project’s developer, Starwood Digital Ventures, pledges job creation and and a colossal injection of tax revenue into the coffers of the county and Colonial School District. They said this will bring about 3,500 construction jobs and retain 700 permanent jobs to keep the facility up and running.

County Council member Dave Carter has spent months drafting the regulations that were voted on during this meeting. This is substitute number three on the original bill from August 2025, including compromises on noise and lighting restrictions. Carter wants sensible data center regulation in the county, and he told Delaware Online/The News Journal in March he thinks Project Washington is a “bad deal” for the state.

He thinks the potential demand on the state’s already strained electrical bid will hurt residents’ bills. He also disputes the developers’ promises on permanent jobs and tax revenue.

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“We just have to really be cognizant and thoughtful and make sure that we are ensuring that we protect our communities, and that we manage these things well if they are coming,” Carter said at the meeting.

It hasn’t been an easy sell to the rest of County Council. Council member Janet Kilpatrick, who represents Hockessin, wanted consistent regulations on lighting and noise levels to avoid scaring off potential business. Data centers have sprung up across the country as the highly demanding AI industry exploded in popularity.

“If we don’t have some stability, these people are not going to be able to go through a lender to get money, and so that means that they leave, and I’m sure that there’s a group of people in this room that would love to see them leave, but that’s not how we build economic development,” she said at the meeting. “Part of what we need, in my mind, in economic development is that we have a stable land use code.”

Although this doesn’t apply to the controversial Project Washington, County Council will still have a say on the re-zoning of half of the project’s land. The County Board of Adjustment will also have to approve its electrical switch station, Culver said.

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At the meeting, residents showed up with mainly negative comments for Project Washington. But, members of trade unions showed up in support of the project’s potential to create construction jobs.

Starwood Digital Ventures will continue to move through the approval process with no changes to Project Washington, according to Jim Lamb, who is handling media for the project.

“We’re really happy there’s a consensus within the council and it’s a really great opportunity for the residents of New Castle County,” Lamb said Tuesday night.

Now this goes to County Executive Marcus Henry’s office, who can sign or veto these regulations.

Half of Project Washington’s proposed land still needs a re-zone, which requires council approval. The project was stifled by DNREC, who ruled the proposal’s size, use and backup diesel generators violate the decades-old Coastal Zone Act.

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Starwood Digital Ventures disagrees, and filed and appeal, saying the state environmental agency didn’t classify the project correctly and said it “solely focuses on alleged environmental risk and worst-case emissions, and does not fairly weigh or explain these countervailing factors in light of regulating criteria.”

The appeal’s hearing is in Dover and begins on March 24.

Shane Brennan covers Wilmington and other Delaware issues. Reach out with ideas, tips or feedback at slbrennan@delawareonline.com.



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Coast Guard Responding to Large Barge Fire in Delaware Bay

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Coast Guard Responding to Large Barge Fire in Delaware Bay


The U.S. Coast Guard and multiple partner agencies are responding to a barge fire in Delaware Bay on Tuesday after a tug reported that the vessel it was towing had caught fire.

According to the Coast Guard, watchstanders at Sector Delaware Bay received a call at approximately 8:20 a.m. from the tug Douglas J, reporting that the barge under tow was on fire. The barge was reportedly carrying scrap metal.

Authorities are towing the burning barge to a position about two miles off Maurice River Cove, New Jersey, in an effort to move the incident away from the main shipping channel while firefighting operations continue.

The Coast Guard has established a safety zone and issued a Broadcast Notice to Mariners as crews work to contain the fire and reduce potential hazards to vessel traffic in the busy port complex. Multiple fire departments have deployed fireboats to assist with suppression efforts.

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No injuries have been reported and the cause of the fire remains under investigation.

Responders from Coast Guard Station Philadelphia, Coast Guard Station Cape May, and Coast Guard Air Station Atlantic City have been deployed to assist. Partner agencies on scene include the Wilmington Fire Department, Delaware City Fire Department, Philadelphia Fire Department, New Jersey Office of Emergency Management, and Delaware Emergency Management.

The incident follows another major barge fire in the Delaware Bay region in 2022, when a barge carrying scrap household appliances burned for approximately 26 hours in what officials described as the largest firefighting operation in Delaware state history.

Response operations for the current fire remain ongoing.

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DMV in Minquadale, Delaware reopening months after trooper’s death

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DMV in Minquadale, Delaware reopening months after trooper’s death


Tuesday, March 10, 2026 9:34AM

Minquadale DMV reopening Tuesday

MINQUADALE, Del. (WPVI) — The DMV in Wilmington, Delaware is reopening at 8a.m. Tuesday.

This comes after the deadly shooting of State Trooper Matthew “Ty” Snook, 34, in December 2025.

A man walked into the facility and shot and killed Snook.

The DMV said service at the Wilmington location will be by appointment only for now. The Delaware City, Dover, and Georgetown DMV locations will continue to offer walk-in service to customers.

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