Delaware Democrats vote en-mass to support Musk’s attack on the Courts
Yesterday morning I received a plea from the Democratic National Committee asking for donations to help fight Elon Musk’s $10 million attempt to buy the Wisconsin Supreme Court. I applaud this effort. But, I am deeply concerned that local Democrats are actually supporting a similar Musk attack on the Delaware Chancery Court. The Governor supports Musk’s attack, the State Senate voted unanimously for Musk, and the House of Representatives is likely to vote with Musk on Tuesday.
Tiny Delaware is home to over 2 million business registrations. The primary reason for this is that companies benefit from a specialized legal structure like the Chancery Court. The seven-judge Chancery Court only hears business cases, offering exception stability in interpreting corporate law. Delaware case law is taught in every law school in the nation. The Chancellor (head judge) and Associate Chancellors are appointed with an eye toward political balance and maintain the highest standards of non-partisanship. In addition, a strong cadre of law firms provides expert knowledge to parties on both sides of an issue.
All of this has worked very well for many years. That is until the last several years. When Philip Shawe and his wife divorced, they could not agree on how to equitably share their company, TransPerfect. After a suit in Chancery Court, the court appointed a mediator to oversee a fair division of assets. Mr. Shawe became irate and began a $2 million advertising campaign attacking the integrity of the Chancery Court. His mother joined him with $500,000 in ads falsely claiming Joe Biden had colluded with the Court. Shawe moved his company to Nevada in 2018 but has maintained a barrage of attacks on the Chancery Court and personal attacks on the judges.
The Tesla Board of Directors voted to offer Elon Musk a new compensation package of $56 billion. Mr. Musk paid his board members nearly $1 billion to facilitate their decision. Tesla stockholders sued in Chancery Court, arguing that such outrageous compensation was damaging to their interests. The Chancellor of the Court heard the case and determined that the Board was not independent of Mr. Musk and ruled in favor of the stockholders. She also ordered the members of the Board to return their special compensation. Like Mr. Shawe, Elon Musk responded with a vitriolic and misogynistic attack on Delaware’s first female Chancellor. Musk also moved his companies to Nevada and Texas.
Like Shawe, Musk should have no further dealings with the ChanceryCourt, but both are now out for revenge. Musk has engaged several high-priced Delaware law firms and two male Republican Chancellors to change the law that protects stockholders from predatory corporate controllers. This is intended to destabilize Delaware’s reputation in corporate law. Referred to as SB 21, this proposed legislation was not written by Delaware legislators. It was handcrafted by Musk’s hired guns. It is being fast-tracked in the legislature with no amendments allowed and very reduced time allocated to opponents. Musk’s lawyers have spread misinformation that without the new legislation, companies will leave Delaware in droves. In fact, in 2018 Mr. Shawe called for a mass exit and was ignored. So far four companies have left at Mr. Musk’s urging. Three of them are his. No Chicken Little, the sky is not falling.
This despicable process is that it is being facilitated by Delaware Democrats. The Governor is a newly elected Democrat and the Senate and House are overwhelmingly Democratic. This should be a no-brainer. Delawareans should be insulted by the attacks of Shawe and Musk. They need no fundraising to defeat this power play. They just need to vote.
I wish it were this simple. But, the new Governor has a new owner. The largest contributor to Matt Meyer’s campaign was Phillip Shawe. Can anyone think that a right-wing donor gives $1 million and doesn’t expect Mr.Meyer to bend to his wishes? SB 21 was introduced 1 week after Meyer’s inauguration. He immediately announced his support and met quickly with representatives of billionaire corporate owners. We have spoken to Senators and Representatives who agree that their constituents oppose the bill, but all say they cannot buck the Democratic leadership. Opponents of the bill appealed to Delaware’s Congressional delegation. Senator Chris Coons, an erstwhile liberal, has joined Meyer in supporting Musk. Senator Lisa Blunt and Representative Sarah McBride seemingly are in hiding. How can they not be alarmed by the attacks on the female Chancellor by Musk and the two former Chancellors who resent that a woman now leads the Court?
What is going on? Why has Meyer become a Quisling who supports those who seek to punish Delaware and its Chancery Court for upholding the law? I guess money talks. This is a genuine embarrassment to the Democratic Party as it tries to protect America’s legal system. The National Party must intervene and tell its Delaware officials to stop supporting right-wing causes.
