"You can check out any time you like
But you can never leave"
Last week, I wrote about a pending challenge to the proposed redomestications of TripAdvisor, Inc. and Liberty TripAdvisor Holdings, Inc. from Delaware to Nevada. The plaintiffs are claiming that these redomestications would result in breaches of fiduciary duty on the part of the corporations' controlling stockholder and directors.
As a long-time beneficiary of corporations fleeing other jurisdictions, Delaware may be tempted to put the brakes on its own corporations wishing to flee to the sunny uplands of other states. Efforts to retard emigration from Delaware may backfire, however. Other states may follow Delaware's lead and decide that it is a breach of fiduciary duty for their corporations to redomesticate or reincorporate in Delaware. Even if corporations are free to flee to Delaware, they may be reluctant to do so , knowing that it may be difficult to leave should the allure of Delaware law fade in the future.