A tsunami of corporate departures continues to hit Delaware as more than 60 public companies with a combined market cap of over $3 trillion have quit the state in the past two years alone.
In just the past week, two significant public companies — FirstCash Holdings and GPGI Inc. — have announced plans to leave Delaware, underscoring what many analysts now describe as a corporate exodus.
FirstCash Holdings (NASDAQ: FCFS), a $9 billion market cap company, filed plans with shareholders to reincorporate in Texas.
The move, the company said, is driven by a desire for "more clarity and predictability" in legal matters, along with efforts to reduce "opportunistic and frivolous litigation."
Shortly after, GPGI Inc. — formerly CompoSecure and valued at about $5 billion on the NYSE — announced it would leave Delaware for Nevada, citing the state's "costly and often meritless litigation" environment as a primary factor.
These announcements are part of a much larger trend as companies may capsize the tiny, ultra-liberal state that had been known for proudly backing its senator Joe Biden for president, and declared itself among the biggest proponents of diversity, equity, and inclusion programs.
Among those leaving are some of the most recognizable names in corporate America, including Tesla, SpaceX, Coinbase, Roblox, Dropbox, Dillard's, and Simon Property Group.
Perhaps most telling is not just the companies leaving Delaware, but those choosing to bypass it altogether.
In March, Exxon Mobil — one of the largest publicly traded companies in the world, with a market cap of more than $600 billion — announced plans to move its incorporation from New Jersey to Texas.
Notably, the company considered Delaware but ultimately rejected it, unanimously voting in favor of Texas.
CEO Darren Woods emphasized the importance of avoiding shareholder litigation abuse while praising Texas for its pro-business environment and understanding of industry needs.
Similarly, billionaire investor Bill Ackman has reincorporated Pershing Square Capital Management in Nevada and structured major deals — including a proposed $64 billion acquisition of Universal Music Group — through Nevada-based entities.
Meanwhile, at least seven other shareholder votes on other companies seeking to move from Delaware are scheduled in the coming months, suggesting the pace of departures is accelerating.
For over a century, Delaware has been the preferred home for corporations, thanks largely to its Court of Chancery — a specialized court known for its expertise in business law — and a well-established legal framework that offered predictability.
But that reputation is now history.
Corporate leaders increasingly argue that Delaware's legal environment has become unpredictable, with courts seemingly controlled by major trial firms that donate heavily to the Democrats' local political machine.
With big money at work Delaware's judges no longer see the law as black and white.
Harvard professor emeritus Alan Dershowitz has called the state's judiciary "one of the most corrupt in the nation."
Critics have noted the court's inconsistent rulings and huge payouts for trial firms that bring often frivolous shareholder suits.
Voyager Technologies, a $1.6 billion space and defense company, recently cited this concern when it filed to move to Texas.
Its board pointed to Texas's codified legal system as offering greater predictability than Delaware's case-law-driven approach.
Dream Finders Homes (NYSE: DFH), another firm departing Delaware, echoed similar concerns, noting that Texas provides "greater certainty" and less reliance on judicial discretion.
Litigation concerns drive decisions
One of the most frequently cited reasons for leaving Delaware is the rise in shareholder litigation.
"Delaware's once-esteemed Court of Chancery is increasingly viewed by corporate leaders as unpredictable, with rulings that introduce uncertainty into routine business decisions and open the door for enterprising trial attorneys to file lucrative lawsuits," Karen Harned, a former executive director of the National Federation of Independent Business Small Business Legal Center, recently wrote in DelawareOnline.com.
Many of these lawsuits, critics say, are frequently settled quickly to avoid costly and time-consuming litigation — resulting in financial gains for attorneys but limited benefit for shareholders.
This trend has contributed to rising directors and officers' (D&O) insurance costs and increased legal expenses, diverting resources away from business growth and innovation.
As one analysis noted, attorneys often "troll for potential plaintiffs" and encourage challenges to corporate decisions, creating a cycle of litigation that companies feel compelled to settle.
Texas and Nevada gain ground
As Delaware's dominance wanes, states such as Texas and Nevada are actively positioning themselves as more business-friendly alternatives.
Speaking at a recent roundtable, Florida Gov. Ron DeSantis said the movement reflects broader dissatisfaction with states perceived as unfriendly to business.
"A lot of these states, including Delaware, have made it difficult to do business," DeSantis said. "A variety of factors have led an unprecedented movement of people and capital into states like Texas and Florida."
Meanwhile, regulators and experts warn that Delaware's historic dominance is no longer guaranteed.
Securities and Exchange Commission Chair Paul Atkins said in a recent speech at Texas A&M that Delaware's time has passed, saying that "competition does not pause for tradition, nor does it defer to incumbency."
Texas has established specialized business courts and implemented stricter standards for shareholder lawsuits, requiring more substantial ownership stakes before claims can proceed.
These reforms aim to limit the influence of investors with minimal holdings and reduce what companies describe as abusive litigation practices.
Nevada, meanwhile, has marketed itself as offering similar benefits to Delaware's historic system — but with lower legal risks and fewer regulatory burdens. Its lower fees and simplified corporate structure have attracted companies seeking both cost savings and legal stability.
The appeal of these states is also tied to tax advantages.
Texas, for example, offers incentive programs that encourage companies to align their legal domicile with their operational headquarters — a factor cited by FirstCash Holdings in its decision to relocate.
With billions in corporate value already on the move and more departures likely, Delaware faces mounting pressure to reform its legal and regulatory environment.
But for now, America's corporate giants are not taking the risk of waiting.
Instead, companies are increasingly seeking jurisdictions that offer what Delaware once did best: stability, predictability, and a legal system they can trust.
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