The Delaware Question

Several high-profile companies have recently quit Delaware, choosing to reincorporate in Texas, Nevada, and other states that promise a more deferential approach — less oversight, more flexibility. These moves, dubbed “Dexits,” have stirred debate in boardrooms and across business publications about whether others should follow.

For companies run by founders or controlled by dominant shareholders, the appeal is clear. But discussion has focused almost entirely on governance: greater deference to management, looser fiduciary standards, less scrutiny of board decisions.

Less attention is paid to the types of commercial litigation that fill court dockets — commercial contract disagreements, M&A disputes, implied covenant claims. These are the types of conflicts companies face on a regular basis, and they shape corporate value far more than any fight over fiduciary duty. The same questions confront new businesses choosing their first jurisdiction, not just those contemplating a move.

Delaware has a century of precedent on these types of issues and dedicated judges with deep experience in commercial law. Other states lack this specialized infrastructure and most allow jury trials for commercial disputes.

The differences aren’t trivial. Moving may make sense for some, but companies weighing a Dexit should understand the trade-offs.

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