If you need to be in court in the morning but lost your suit on the Amtrak train to Wilmington, Del., Leonard Simon is your guy. Simon owns a men’s wear shop where out-of-state attorneys account for a significant number of his patrons. His clientele underscores how, for more than a century, the First State has been the mecca of U.S. corporate law—roughly two-thirds of the Fortune 500 is incorporated in Delaware—which generates billions in revenue for the state and helps sustain local businesses like Wright & Simon, which Simon’s father cofounded in 1935.
These days, though, Simon is feeling uneasy as a growing number of prominent business leaders like Elon Musk and Bill Ackman, who are critical of Delaware’s courts, are pulling up stakes and registering their companies elsewhere. In June, Tesla shareholders voted to reincorporate in Texas after a Delaware judge rejected a pay package for Musk recently valued at $100 billion. Meanwhile, Ackman recently said his activist hedge fund, Pershing Square, will follow suit and reincorporate in Texas or Nevada, while Mark Zuckerberg’s Meta is reportedly also mulling a move to the Lone Star State.
