Companies incorporated in Delaware would be able to bypass their own boards and cut deals more easily with significant shareholders under a controversial law passed this week in the state that is home to some of the biggest US companies. The changes, approved by the Delaware House of Representatives on Thursday night and the Delaware state senate last week, now go to the governor, who is expected to sign the bill into law.
“The uncertainties exposed by the Moelis decision are too widespread to be left to case-by-case evaluation, and too disruptive to fester for a year or more without legislative guidance,” wrote Larry Hamermesh, a professor of law at Widener University, in a letter to Delaware lawmakers. But a group of critics including two Delaware judges faulted lawmakers for bringing the legislation before a higher court had weighed in on the Moelis decision on appeal.