Walmart is among the latest and biggest companies considering leaving Delaware as its location of incorporation.
A small group of corporate attorneys last month told Delaware legislators that blue-chip companies including Walmart were considering moving their corporate legal residences out of the state, Semafor reported.
The news is said to have Delaware's political and business leaders reeling.
The small state of Delaware with just over 1 million people derives more than one-third of its state budget from corporate legal fees, not to mention the far greater impact corporation business has on the economy.
But now, many businesses are fleeing the state due to its woke policies, left-leaning judges and anti-business environment.
In late January, social media giant Meta, parent company of Facebook, confirmed it was in talks with Texas about reincorporating in that state and pulling out of Delaware.
Billionaire Elon Musk began the corporate stampede when he moved multiple companies out of Delaware, including Tesla, SpaceX and Neuralink.
The move came after Delaware Chancellor Judge Kathaleen McCormick, a Democrat, ordered Musk to give up a compensation package valued at $55.8 billion, though it was twice approved by shareholders.
The ruling followed McCormick's January 2024 decision that called the Musk pay package excessive and rescinded it.
The move surprised investors and cast uncertainty of the state's long-held position as a neutral corporate arbiter.
Despite painting Musk's compensation as greedy, McCormick did award the trial lawyers who sued Musk a staggering $345 million for their legal filings.
At issue for Musk, Fortune 500 CEOs and entrepreneurs across the U.S. is that the Delaware Court of Chancery has become a haven for shareholder lawsuits and left-wing judicial activism.
Musk was not happy with McCormick's ruling and took to X, writing, "Shareholders should control company votes, not judges."
Another Musk repost stated: "Things to do in Delaware: 1) Leave."
Musk has also urged other companies to quit Delaware as well.
"Never incorporate your company in the state of Delaware," Musk wrote on X.
There are indications the number of companies departing the state has grown significantly, while many new companies are not opting to incorporate there.
A blue state and home of former President Joe Biden, Delaware has come under criticism for its close ties to the Biden family and its political agenda.
In 2023, The Wall Street Journal published an article, co-authored by former Attorney General William Barr, lambasting Delaware for embracing far-left DEI, environmental, social, and governance policies and attempting to force them on corporations.
Others have pointed to the Delaware Court's actions that forced Fox News into an unheard-of $787 million settlement with a voting company over its reports relating to the 2020 election.
Viet Dinh, Fox's chief legal officer, said the Delaware court's rulings "called into question the fundamental fairness and integrity of the Delaware civil justice system."
Last year, The Hill reported that major corporations are fleeing Delaware as a result of its highly politicized agenda.
Material from Reuters was used in compiling this report.
Charlie McCarthy ✉
Charlie McCarthy, a writer/editor at Newsmax, has nearly 40 years of experience covering news, sports, and politics.
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