As Twitter Inc. and billionaire Elon Musk gear up for a knock-down legal fight in Delaware over his attempt to cancel a $44 billion buyout of the social-media platform, some are asking why the case landed in the second-smallest US state and in the oddly named Court of Chancery.
The home state of President Joe Biden changed its business-law statutes in 1899 to attract more corporations. In the 19th century, New Jersey was the most-popular corporate home for most US companies, historians say, but Delaware has since become the undisputed leader. More than 60% of Fortune 500 companies are now incorporated in Delaware, drawn by its director-friendly laws, some tax breaks and the prowess of its courts in handling business disputes. Many merger agreements, including Musk’s $54.20-per-share offer for Twitter, specifically require any legal disputes over the deal be heard in Delaware.