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Explainer: Did Delaware 'lock the doors' to stop companies from leaving, as Musk claims?

Reuters · 1y

Tesla CEO Elon Musk claims that Delaware is trying to prevent businesses from leaving the state after a court invalidated his $56 billion pay package. Musk has expressed his intention to reincorporate Tesla in Texas and has urged other companies to do the same. While Delaware has made it easier for companies to leave by requiring only a majority shareholder approval, the court is scrutinizing moves that may benefit a controlling shareholder. Musk's claim comes amid a shareholder lawsuit against TripAdvisor's planned reincorporation in Nevada. A ruling in the TripAdvisor case may have implications for Tesla.