The #DExit continues
Businesses are leaving the First State, most likely egged on by one important guy.
Perusing social media over the weekend I saw the image above and decided it was interesting enough to look into. After all, I live in the 302 and the First State relies heavily (some might say too heavily) on being perceived as a state friendly to businesses. Our onetime Senator - the guy that became President Autopen - was known in a previous life as the “Senator from MBNA,” according to the New York Times:
During and since his time leading the Judiciary Committee, Mr. Biden has been derided by some critics as the “Senator from MBNA,” or “(D-MBNA),” because of his close ties to the credit card behemoth that was based in Wilmington, Del., until it was bought three years ago by Bank of America.
A significant portion of the state’s budget relies on the funding by incorporation fees and the like, previously happily shoveled over by corporate America to take advantage of the state’s easygoing business law climate.
While there were signs the tide was already turning against business, it’s highly likely in my mind that the impetus for Leave Delaware was a January 2024 ruling by Delaware Chancellor Kathaleen St. J. McCormick on behalf of a Tesla stockholder (with just a handful of shares) and former thrash metal drummer, Richard Tornetta, who contended the stock-option based compensation package for Elon Musk was too much. Even after stockholders approved the compensation package later that year, the judge said no deal. (Remember, most of this happened before DOGE and, except for the decision on the appeal after stockholders voted, prior to Musk publicly declaring his support for Donald Trump.)
McCormick was nominated by former Governor John Carney as a vice chancellor and quickly moved up to the Chancellor role three years later. In Delaware, the public has no say on electing judges so all of the members of that court have been selected and confirmed by Democrats, as they have held the governor’s chair since 1993 and the Delaware Senate, who confirms them, has been part of a Democrat trifecta since 2009.
Since the Musk ruling, other companies have joined the exodus to Florida, Nevada, and Texas, and Leave Delaware is there to celebrate every one.
Here’s what they say about themselves:
The Leave Delaware movement is dedicated to shining a light on what we perceive as corruption, bias, and overreach within the Delaware Court of Chancery. Our movement is driven by a commitment to transparency, justice, and the principle that the legal system should serve all equally, without favor or prejudice.
We've observed and documented instances where judicial decisions seem to override the will of shareholders and boards of directors, political bias, and lawfare, questioning the autonomy and governance structures of corporations. This trend, as highlighted by recent cases involving significant companies and high-profile figures, prompts us to ask critical questions about judicial power, its limits, and its implications for business operations and investor confidence.
Unlike many other advocacy groups, they don’t have a specific donate button, but they do state: Our campaign is powered by contributions from supporters like you.” They don’t appear to be a 501(c)(3) or a PAC, though.
What they do have is an active Twitter page, with 1,878 posts dating back to August 6, 2024. Their first post got just 113 views, but now they average a low five figures on their original posts, which generally are announcements that yet another company is leaving. They’ve grown to over 86,000 followers.
I’m not going to pretend that I understand the legalese and gobbledygook that came with SB21 from this year’s Delaware General Assembly, which was intended to address these concerns. But what I can tell you is that it took just over a month to be introduced, substituted for, voted through the Senate 20-0, taken to the House will all amendment attempts defeated or stricken (splitting the Democrats as those who tried to amend it were among a small faction who voted against it) where it passed 32-7, and signed by Governor Matt Meyer seemingly moments after it was voted through on March 25. The substitute took just 13 days to go through the General Assembly from start to signing - it probably would have been accomplished even sooner, but the General Assembly takes most of February off to work on the budget. Think they saw this as an urgent need?
Because of that, I can’t tell you whether SB21 will stop the bleeding or not. But what I can tell you is that the First State has received a wake-up call to start thinking about ways to diversify its income sources, and (more importantly) get its spending priorities in order.
Instead, Governor Meyer is planning on a more “progressive” (read: soak the producers) tax system to pay for his ever-growing budget, along with an increase in the regressive cigarette and tobacco taxes as well as license fees and - most likely - the gasoline tax. (And just wait until they start taxing pot to death.)
Keep it up and it won’t just be businesses leaving Delaware. Look for a lot of capital to head south until the remaining people come to their senses.
(By the way, you ain’t getting rid of me that easily. I’ll stay and fight this crap.)
In the meantime, though, you can Buy Me a Coffee, since I have a page there now.
These Blue states are all the same. Washington passed a capital gains TAX even though the Constitution says no income tax. They called it something else I can't remember which of course the WA supreme court okayed. So the exodus of the wealthy including Bezos began.
Now through bad management, (suprise), they changed a surplus into a $12 billion deficit and are busy figuring ways to tax the crap out of us, including changing the caps on real estate tax.