Delaware's Status As Corporate Capital Might Be On The Line In A Fight Over Shareholder Lawsuits

Delaware is trying to protect its status as the corporate capital of the world amid fallout from a judge's rejection of billionaire Elon Musk 's landmark Tesla compensation package , although critics say fast-tracked legislation will tilt the playing field against investors, including pensioners and middle-class savers.

A Delaware House committee was expected to vote Wednesday on the bill, which is backed by Democratic Gov. Matt Meyer who says it'll ensure the state remains the "premier home for U.S. and global businesses" to incorporate.

Backers say it'll modernize the law and maintain balance between corporate officers and shareholders in a state where the courts, for a century, have settled all sorts of business disputes as the legal home of more than 2 million corporate entities, including two-thirds of Fortune 500 companies.

Critics - including institutional investors, pension funds and asset managers - say it'll lower corporate governance standards, curb shareholder rights and, as a result, limit the ability to hold corporate officers accountable for decisions that violate their fiduciary duty.

The bill passed the state Senate unanimously last week.