AMC Moving From Delaware as Corporations Exit

AMC Networks Inc., owner of the popular cable AMC Channel, is planning to move its corporate domicile from Delaware and reincorporate in Nevada, joining a growing list of companies abandoning the state.

The AMC news hit just days after Madison Square Garden Entertainment announced it was planning to leave Delaware, a move made by at least 20 major companies in the past year, according to Robert Anderson, a professor of law at the University of Arkansas.

In a recent shareholder notice, AMC Networks Inc. said it sought approval of plans to 'redomesticate' from Delaware to Nevada, marking the latest high-profile exit from a state under fire for its left-leaning judicial system.

For decades Delaware has attracted businesses for decades with its well-established legal framework and court system.

But that has changed as the state's reputation as a neutral legal playing ground has fallen to the wayside with recent court rulings.

A Delaware judge nullified a $56 billion compensation package for Musk, prompting him to relocate both companies' legal homes to Texas.

The compensation package was approved by Tesla shareholders twice — and based on Musk hitting benchmarks which saw the company's value zoom over $1 trillion.

Chancellor Kathaleen McCormick, a Democrat, said the compensation package was simply too rich, but astonishingly she did compensate the lawyers who sued Musk $345 million for their legal filings.

At issue for Musk, CEOs of other Fortune 500 companies, and entrepreneurs across the nation is that the Delaware Court of Chancery has become a haven for shareholder lawsuits and left-leaning judicial activism.

After the ruling Musk posted on X, "Never incorporate your company in the state of Delaware."

The ruling has triggered a wave of corporate exits and raised questions about Delaware's business-friendly environment.

Following Musk's move, Pershing Square Capital Management founder Bill Ackman announced in February that his firm would reincorporate in Nevada. Dropbox followed suit, finalizing its move earlier this month.

Meta, the parent company of Facebook, and Walmart are also reportedly considering relocation to either Texas or another state.

In March, the nation's largest mall owner, Simon Property Group announced it was quitting Delaware citing the state courts' "meritless litigation" and "judicial interpretation without a clear statutory bias," 

In response, Delaware lawmakers are pushing legislative reforms to retain and attract businesses. A bill passed unanimously by the state Senate seeks to revise how deals between corporate leaders and major shareholders are evaluated. The bill now heads to the House of Representatives and, if approved, will be sent to Democratic Gov. Matt Meyer, who supports the effort.

But critics of Delaware say the state's legal apparatus has fully embraced a DEI-based approach to the law and that will not change soon.

Last year, former Attorney General William Barr writing in the Wall Street Journal lambasted the state for embracing far-left environmental, social, and governance policies and attempting to push them on corporations.

In another Delaware case, Viet Dinh, Fox News former chief legal counsel, complained the network was forced into an unheard-of $787 million settlement with a voting company over its reports relating to the 2020 election.

Dinh said the Delaware Superior Court refused to allow the network to show its balanced coverage of the 2020 election. The court also moved to give the plaintiff extraordinary discovery in the case.

Dinh 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.