AMC Networks Inc. (owner of the popular cable AMC channel) plans to move from Delaware, its corporate domicile, and re-incorporate in Nevada. They will join a growing number of companies that are abandoning Delaware.
AMC’s announcement came just days after Madison Square Garden Entertainment announced its plans to leave Delaware. At least 20 other major companies have made similar moves in the last year, according to Robert Anderson, professor of law at the University of Arkansas.
AMC Networks Inc., in a recent notice to shareholders, said that it was seeking approval for plans to “redomesticate” from Delaware to Nevada. This is the latest high-profile exit from a left-leaning state.
Delaware’s well-established court system and legal framework have been attracting businesses for decades.
Recent court rulings have changed that. The state’s reputation for being a neutral legal arena has been eroded.
Musk was forced to move the legal headquarters of both companies to Texas after a Delaware judge nullified his $56 billion compensation package.
Tesla shareholders approved the compensation package twice, and it was based on Musk meeting benchmarks that saw the value of Tesla soar to over $1 trillion.
McCormick (a Democrat) said that the compensation package offered by Musk was too generous, yet she compensated the lawyers for their legal filings with $345 million.
Musk, other CEOs of Fortune 500 companies, and entrepreneurs from across the country are concerned that the Delaware Court of Chancery is becoming a haven for shareholder lawsuits and leftist judicial activism.
Musk said on X, “Never form your company in Delaware.”
The ruling sparked a wave in corporate exits and has raised questions about Delaware’s business-friendly climate.
Bill Ackman, the founder of Pershing Square Capital Management, announced in February that his company would re-incorporate in Nevada. Dropbox made the same move, finalizing it earlier this month.
Walmart and Meta are also said to be considering relocating either to Texas or another state.
Simon Property Group, the largest mall owner in the United States, announced its departure from Delaware on March 1st, citing “judicial interpretations without a clear bias” and “meritless litigation.”
In response, Delaware lawmakers are pushing legislative reforms to retain and attract businesses. A bill passed unanimously by the state Senate seeks to revise how deals between corporate leaders and major shareholders are evaluated. The bill now heads to the House of Representatives and, if approved, will be sent to Democratic Gov. Matt Meyer, who supports the effort.
Critics of Delaware, however, say that the state’s legal system has fully adopted a DEI approach to law, and this won’t be changing anytime soon.
In the Wall Street Journal, William Barr, the former attorney general, lambasted last year the state’s embrace of far-left policies in governance, environmental and social issues, and for trying to force them onto corporations.
Viet Dînh, Fox News’s former chief legal advisor, claimed that the network had been forced to settle for an unprecedented $787 million with a voting firm over reports about the 2020 elections.
Vihn claimed that the Delaware court refused the network’s request to broadcast its balanced coverage of the 2020 elections. The Court also requested that the plaintiff be given extraordinary discovery in this case.
Dinh stated that the Delaware court’s decisions “called into doubt the fundamental fairness of the Delaware Civil Justice System.”
The Hill reported last year that Delaware’s highly politicized agenda is driving major corporations away.