An activist Delaware judge, Kathaleen McCormick, twice canceled Elon Musk’s compensation package at Tesla. It had been overwhelmingly approved by stockholders both times. After that, business owners realized they could lose it all if a politician targeted them.
One judge in Delaware can seek retribution and harm or destroy a company. It’s the same in New York and California.
The State nullified the shareholders, the Board of Directors, and the entire company’s management just to deprive Elon of his pay.
Judge Kathaleen ordered Musk to pay lawyer’s fees.
The lawyers who voided Elon Musk’s $56 billion compensation as excessive initially demanded a $6 billion legal fee, payable in the electric car maker’s stock. The fee is at the hourly rate of $288,888. That’s accurate, not a typo.
The whole thing was a scam to hurt Musk. Biden was at war with Musk then; Delaware is his turf.
Musk called it “criminal” that “the lawyers who did nothing but damage Tesla want $6 billion.”
Jeb Bush even responded in an op-ed also vilifying the Manhattan Court decision against DJT.
In Delaware, Chancellor Kathleen McCormick of the Court of Chancery ordered the unwinding of five years of Mr. Musk’s incentive-based compensation at Tesla, which had been approved by 80% of the company’s shareholders. The plaintiff, Richard Tornetta, held nine shares in 2018—worth about $200 then and $2,000 today, after the execution of the compensation plan that supposedly injured him.
Mr. Musk’s compensation plan awarded him stock bonuses tied to earnings and stock-value benchmarks, which many critics thought he could never meet. When he did, he received $56 billion, enriching shareholders like Mr. Tornetta along the way.
[…]
They called for appellate courts “to stop further damage to the reputations of their respective judiciaries.”
“If they don’t, blue-state politicians may have the satisfaction of ‘sticking it’ to Messrs. Trump and Musk, but the loss to those states will be significant,” they continued. “The damage to the legal fabric of the country will be even worse. A dispassionate justice system is at the heart of American exceptionalism, and the country will be poorer if we lose it.”
Jeb Bush was correct.
Tesla, SpaceX, The Boring Company Neuralink X Corp., Tripadvisor, Meta, Fidelity National Financial, NewsMax, Sonoma Pharmaceuticals, Dropbox, TransPerfect, Dole, Dupont, Ancestry.com, Pershing Square, and The Trade Desk are all leaving. They are heading for greener pastures in Texas and Nevada.
The Trade Desk wrote on X:
JEFF GREEN: “The Trade Desk has felt the weight of this trend in Delaware courts.” The increasingly litigious environment in Delaware facing corporations with controlling stockholders has created unpredictability in decision-making and has started to impede our ability to act quickly.”
After witnessing the legal chaos with Elon Musk/Tesla and facing their own legal issues in Delaware, @TheTradeDesk shareholders approved moving the company’s incorporation to Nevada in 2024.
Delaware Governor Matt Meyer has issued a response to companies leaving Delaware:
“It’s really important we get it right for @elonmusk or whoever the litigants are in Delaware courts,”—”We’re cognizant that there may be some things that need to change. We’re going to work on them.”
Too late.
After a hundred-plus years, Delaware is ruined for businesses and they are losing billions of dollars:
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