Delaware Court Upholds Corporate Law Overhaul

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The Delaware Supreme Court has upheld a 2025 law that overhauled the state's corporate code, making it harder for investors to challenge deals approved by independent directors or public shareholders. The law, known as SB 21, was aimed at preventing companies from leaving Delaware, which remains the legal home to most large public companies.

Why it matters

Delaware is a key state for corporate law, and the ruling helps protect the state's position as a hub for large public companies. However, critics argued the law limits the ability of shareholders, including pension funds, to police potential conflicts of interest.

The details

Under the new law, if a deal is approved by a board committee with a majority of independent directors or by a public shareholder vote, investors cannot challenge it in court. Previously, both steps were required and the board committee had to be entirely independent. The law also makes it harder to challenge a director's independence and limits records available to shareholders investigating a deal.

• The Delaware Supreme Court upheld the law on February 27, 2026.
• The law, known as SB 21, was adopted by lawmakers in March 2025.

What’s next

The ruling is likely to face further legal challenges from opponents who argue the law violates the state constitution.