In keeping with the close watch that the Business Court keeps on developments in Delaware corporate law, we suggest a brief review of recent changes made by the Delaware legislature in an attempt to stem the exit of corporations seeking to recharter in other states. Our colleagues Andrew Santana and Kacey Fonner wrote about the legislative fix to address the “DExit” crisis.

The legislation was fueled by a Delaware state court ruling favoring shareholders seeking to challenge a corporate executive’s multibillion-dollar compensation package. That company fled to Texas and others had threatened to recharter elsewhere. Delaware’s response in Senate Bill 21 was to place obstacles in the path of shareholders seeking to challenge executive compensation.

The financial stakes for Delaware are substantial. With more than 2 million registered entities, the approximate $2 billion generated from the corporate franchise accounts for a healthy slice of the state’s annual budget.