/>iProfessor Stephen Bainbridge has offered a rebuttal to my observation that Delaware's corporate law is inaccessible to everyday observers. He posits that inaccessibility is a "feature not a bug". As an example, he describes a merger transaction rife with complexities and expresses doubt that "a deal with so many wrinkles can be governed by law accessible to everyday users".
While many large corporations with significant legal resources continue to be incorporated in Delaware, many more smaller and middling corporations are incorporated there. Simply put, Delaware is not a luxury store that caters exclusively to customers of means. It is a store where both the rich and the poor shop.
The problem for οἱ πολλοί is that Delaware's decisional law is immense and heavily nuanced. For example, Delaware courts have cited, interpreted, explained and even partially overruled the seminal case of Smith v. Van Gorkum, 488 A.2d 858 (Del. 1985) in over 250 opinions. Consequently, Vice Chancellor J. Travis Laster has characterized Van Gorkom’s subsequent history as "convoluted and potentially misleading". W. Palm Beach Firefighters' Pension Fund v. Moelis & Co., 311 A.3d 809, 846 (Del. Ch. 2024). Delaware court decisions are often extremely lengthy. The Court of Chancery's ruling in Moelis filled more than 70 pages and included more than 350 footnotes. Moelis is now on appeal to the Delaware Supreme Court. Gaining an understanding of Delaware corporate law is also difficult because the Delaware Court of Chancery is a court of equity. As John Selden famously observed:
Equity is a roguish thing: for law we have a measure, know what to trust to; equity is according to the conscience of him that is Chancellor, and as that is larger or narrower, so is equity. ‘Tis all one, as if they should make his foot the standard for the measure we call a Chancellor’s foot; what an uncertain measure would this be! One Chancellor has a long foot, another a short foot, a third an indifferent foot; ‘tis the same thing in the Chancellor’s conscience.*
Thus, Court of Chancery decisions are often notable for their fact-dependency and nuance. Consequently, significant time and effort is required to read and master the subtleties of Delaware's gigantic corpus of decisional law.
Nevada's corporate law is in contrast heavily focused on its statutes. In comparison to Delaware opinions, the opinions of Nevada's courts are refreshingly brief. They generally stick to the point and do not digress with dicta, such as Vice Chancellor's discussion of how damages might be determined when the question to be decided was whether to enjoin a reincorporation from Delaware to Nevada. Palkon v. Maffeii, 311 A.3d 255 (Del. Ch. 2024), cert. denied, No. 2023-0449-JTL, 2024 WL 1211688 (Del. Ch. Mar. 21, 2024). See What Are The Damages?
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*The Table-Talk of John Selden, p. 49.
