(C) Common Dreams
This story was originally published by Common Dreams and is unaltered.
. . . . . . . . . .
Tesla's law firm drafts Delaware bill that could salvage Musk pay package [1]
['Lora Kolodny', 'In Lorakolodny']
Date: 2025-02-18
A law firm that represents Tesla and Elon Musk has written proposed legislation that would alter Delaware corporate law, according to a person directly familiar with the drafting of the bill who asked to remain unnamed in order to speak about the matter.
The proposed legislation, drafted by Richards, Layton & Finger, or RLF, would amend Delaware General Corporation Law, and if adopted, could pave the way for the reinstatement of Musk's 2018 CEO pay package at Tesla, worth tens of billions of dollars in options.
RLF confirmed its involvement to CNBC.
A spokesperson for the law firm said RLF's role in the legislation draft was not done on behalf of any specific client.
"We are proud to have been part of a group, including highly respected lawyers, professors, and former jurists, assembled by elected officials to recommend language included in the proposed legislation," Schmidt also said in the statement.
RLF declined to name the group members.
Lisa Schmidt, president of RLF, told CNBC in a statement that, "Statutory changes are necessary to restore the core principles that have been the hallmark of Delaware for over a century and ensure that Delaware remains the preeminent jurisdiction for incorporation."
After CNBC's story published, Fortune reported that Delaware Law School professor Lawrence Hamermesh, along with former Delaware Chancellor William Chandler and former Delaware Supreme Court Justice Leo Strine also had a hand in crafting the bill. Chandler and Strine work for law firms Wilson Sonsini and Wachtell, Lipton, Rosen and Katz, respectively.
The bill was introduced in the Delaware General Assembly on Monday and would require approval by the state's two chambers as well as Gov. Matt Meyer before it could become law.
The bill did not go through the normal procedures for legislation that seeks to change Delaware corporate law, according to Boston College corporate law professor Brian JM Quinn. For decades, such legislation has been drafted, debated and reviewed by the Delaware State Bar Association's Corporation Law Council before it goes to the legislature, he said. The council, which includes attorneys with a wide range of clients and interests, was not consulted on this bill before it was filed, Quinn said.
After CNBC published this story, Delaware Secretary of State Charuni Patibanda-Sanchez said in an e-mailed statement that Meyer has requested a review of the proposed legislation and "looks forward to viewing a final product that meets the evolving needs of all our stakeholders."
Sen. Elizabeth Warren, ranking member of the Senate Banking Committee, called the drafted legislation Musk's "latest plan to rip off the American people to make himself and his fellow billionaires richer."
"Musk wants to write his own laws to take tens of billions of dollars from Tesla shareholders after the courts said he couldn't," Warren, D-MA, told CNBC in a statement on Wednesday. "Corporate law protects minority shareholders' rights so that greedy controlling shareholders like Musk can't take away safeguards for Main Street investors."
[END]
---
[1] Url:
https://www.cnbc.com/2025/02/18/firm-representing-musk-tesla-drafts-bill-for-delaware-corporate-law.html
Published and (C) by Common Dreams
Content appears here under this condition or license: Creative Commons CC BY-NC-ND 3.0..
via Magical.Fish Gopher News Feeds:
gopher://magical.fish/1/feeds/news/commondreams/
