Corporate Governance

Regime Change and the Delaware Courts

By J. Robert Brown

The Deal.com has an interesting article about possible regime change at the Delaware courts.  In Change Comes to the Chancery, the Deal notes that "as many as four of the [Chancery] court's five judges may move on."  VC Strine, according to the piece:

• is poised to make the most significant jump from Chancery. His deep connections in Delaware politics and his status as a leading voice in the national discussion over corporate governance, combined with the ascension of Delaware senator Joseph Biden to the vice presidency, may help Strine make the jump to Washington, either to one of the two open seats on the U.S. Court of Appeals for the District of Columbia Circuit or to a spot as a regulator.

Stephen Lamb is expected to step down when his term expires next year.  As for the others:  

• Chancellor William B. Chandler III may well follow suit. His term also concludes next year, but he may stay on into 2010 to complete 25 years of service as a state judge. Both are Republicans. Donald F. Parsons Jr., a Democrat, could be tapped for the U.S. District Court of Delaware, where his expertise as a longtime patent lawyer would be more useful than it is on Chancery.

While the names may change, the results are likely to be the same.  It can be expected that any retiree will be replaced with a like minded individual.  Too much of the state's finances ride on the selection.  Moreover, to the extent that a slightly less pro-management jurist slips onto the Chancery Court, any decision that strays too far from the party line will be vigorously struck down by the state Supreme Court. 

What the turnover does provide is an opportunity to insert some diversity onto the bench.  The Chancery Court currently consists of five men, no people of color, with remarkably similar backgrounds.  Perhaps with the anticipated retirements this will finally change.

Full post as published by The Race to the Bottom on December 28, 2008 (boomark / email).