Rick Horvath (Dechert): What Corporate Directors Need to Know About Delaware's SB 21

(0:00) Intro (1:14) About the podcast sponsor: The American College of Governance Counsel (2:01) Start of interview (4:38) His professional background starting with Skadden in Delaware. (5:08) About his corporate governance practice at Dechert LLP (8:10) How Delaware Came to Dominate U.S. Incorporations (13:14) What prompted the pushback against Delaware (15:12) The Tornetta v Musk decision (Elon Musk CEO compensation rescission) (18:40) The Rationale Behind the Governor and Legislature’s Support for SB21 in Delaware. (22:38) Changes to Controlled Stockholder Transactions and the Definition of a Controller (Safe Harbor Provision under Section 144) (24:18) Doctrine of Transaction-Specific Control (reference to paper by Pollman and Will, 2025) (26:06) Explaining the MFW Doctrine, a Delaware law concept that provides a pathway to business judgment review for transactions involving a controlling stockholder, instead of the more rigorous "entire fairness" review (pre SB-21). "The view had become the MFW doctrine was creating both litigation risk and deal uncertainty." (30:45) Changes to Section 220 Shareholder Inspection Rights by SB21. (34:04) Will SB21 stem the tide of reincorporations? "I think it is enabling companies that had been looking at moves to pause" (37:00) Competing States: Nevada and Texas  (40:17) Revisiting Caremark claims (directors' oversight duties). Legal risks vs business risks. (44:50) Book that has greatly influenced his life: Hagakure (early 1700s, Japan) (45:47) His mentors:Mark Thierfelder (Co-Chair, Dechert) Eric Waxman (Ares Management) Tom Allingham (former partner at Skadden) (46:58) Quotes that he thinks of often or lives his life by. (47:52) An unusual habit or an absurd thing that he loves.  (49:11) The living person he most admires: former Delaware Chancellor William B. Chandler, III. Rick Horvath is a partner at Dechert LLP in San Francisco and focuses his practice on corporate governance matters. You can follow Evan on social media at: X: @evanepstein LinkedIn: https://www.linkedin.com/in/epsteinevan/  Substack: https://evanepstein.substack.com/ __ To support this podcast you can join as a subscriber of the Boardroom Governance Newsletter at https://evanepstein.substack.com/ __ Music/Soundtrack (found via Free Music Archive): Seeing The Future by Dexter Britain is licensed under a Attribution-Noncommercial-Share Alike 3.0 United States License