In speaking with a reporter earlier this year, I observed that this proxy season will tell whether DExit has legs.  While not exactly, a flood, several well-known and lesser-known corporations have recently filed proxy statements proposing to reincorporate from Delaware into Nevada.  The most recent filings of which I am aware were made by Madison Square Garden Sports Corp. and Madison Square Garden Entertainment Corp.  

Both of these companies misuse the term "redomestication" in their proxy materials.  While this may seem as a mere cavil, domestication and conversion are two entirely different processes under both Delaware and Nevada law.  See Converting A Corporation Is Not Domestication.  Conflating the two statutory processes may result in improper filings and botched reincorporations, as happened in at least one case of which I am aware.  This same mistake was also recently made by Sphere Entertainment Co. in its preliminary proxy statement. 

Both corporations cite what I believe to be the most fundamental difference between the corporate laws of Delaware and Nevada.  Delaware has relied upon its Court of Chancery to make law while Nevada has relied upon its legislature.  As a result and because the Court of Chancery has been populated with intelligent judges, Delaware's corporate law has devolved into a intricate and finely nuanced body of decisional law.   According to these companies,

Nevada law does not impose situation-specific conditions, such as requiring that interested transactions be both recommended by a disinterested committee of independent directors and subject to a “majority of the minority” vote, in order to benefit from the protection of the statutory business judgment rule.

This is a point that the plaintiff disputes  in its recently filed complaint challenging the recent amendments to Section 144 of the Delaware General Corporation Law, claiming that it is a "false premise" that Nevada law is more predictable.  Plumbers & Fitters Local 295 Pension Fund v. Dropbox, Inc., C.A. 2025-0354-KSJM (filed April 8, 2027.  The complaint, however, fails to provide much information as to why the premise is false, other than to fault Dropbox's proxy statement for including only one example of Nevada's statute focused approach.  

Last week, Xoma Royalty Corporation, a biotech royalty aggregator, last week also joined the lengthening list of publicly traded corporations seeking stockholder approval of a reincorporation from Delaware into Nevada despite the enactment of SB21.

Although Delaware historically has pleased most everyone, it now may be learning the lesson that "you can't please everyone".