Can Corporate Law Be Privatized?

Apr 24, 2026

Never mind moving to Texas or Nevada, what if companies just agreed to governance related contracts with mandatory arbitration and bypass these pesky unpredictable Delaware judges and Chancery Court?

A provocative paper by our friends Eric Talley and Dorothy Lund of Columbia Law School, which calls for “privatizing” corporate law, was the subject of a great discussion with some of corporate law’s leading thinkers at last week’s Ira M. Millstein Memorial Conference set in leafy Morningside Heights.

Amid ongoing debate in board rooms, at law firms and among academics about “D’Exit” and the move by Texas and Nevada to compete with Delaware for the incorporation business, the authors suggest instead of Chancery Court, issuers could “opt out of courts and adopt a fully privatized law” that could ultimately bolster and strengthen its competitiveness.

We all followed the SB 21 passage last year. With less fanfare, Delaware passed DGCL 122(18) in 2024 which authorized shareholder agreements broadly and exempted them from requirements under DGCL 115. This appears to allow issuers to bypass the courts altogether. The nut of the idea: Enact governance agreements contractually and adjudicate through mandatory arbitration.

Chancery Shmancery: No more decisions out of left field, no more appeals to Delaware Supreme Court. Instead, former judges and lawyers would constitute a court-like “Delaware Arbitration Board,” or the DAB, which would be the judges of last resort (and maybe ex-Delaware judges). “It’s a swing for the fences type of approach,” said Professor Talley.

Reactions:

J. Travis Laster, a Delaware Chancery Vice-Chancellor, said in response, “It’s a challenging and ambitious idea.”

Ed Rock of NYU School of Law reviewed the paper’s ideas and acknowledged there is much debate about how broad or narrow existing Delaware law allows for mandatory arbitration. “It would pave the way for companies to go public as long as governance agreements” are included, Professor Rock said. He admitted: “I’m hoping it doesn’t succeed.”

Professor Rock goes on to note that the Delaware franchise on state incorporations “is the lifeblood of the Delaware Bar” and the state and its legal apparatus would be greatly opposed.

Cathy Hwang of the University of Virginia School of Law called the idea a “real solution, provocative and bold,” creating competition within the state of Delaware.

If passed, it would “be the end game to the shenanigans we have been witnessing,” said Sarath Sanga of Yale Law School. He pointed out that all the players in Delaware have acted “in good faith” but the net result is undermining trust. “This would be the next or final step in this sequence,” he added.

Sanga concluded by pointing out that the Delaware “standard,” a set of conventions that together created an immense amount of trust, has been eroded, and therefore the threat of this idea should be “to re-create the standards, rebuild trust” and restore its conventions.

Harvard Law’s Lucian Bebchuk got the last word, calling it the “last” act of Delaware. “This is a warning call,” he said.

ACTIVISM

Financial Times: US Asset Manager Voya Financial Faces Sale Pressure from Activist Fund
Toms Capital has built a stake in $1.1 trillion asset manager Voya Financial, pushing it to sell itself or offload its stop-loss health insurance arm, which posted a $10 million operating loss last quarter and has been a drag on the stock for the last two years. Read More

Bloomberg Deals: Activists Want to Avoid ‘Expensive’ Proxy Fights: Mehrotra
Goldman Sachs’ co-head of Americas M&A and global head of activism & takeover defense Avi Mehrotra joins Bloomberg Deals to discuss the shifting preferences between boards and activist funds, predicting more ‘detente-like’ situations and settlements v. full blown battles to come this proxy season. Watch Here

The Deal: Semiannual Reporting to Redefine Activism
Ron Orol writes that the SEC’s expected move to semi-annual reporting could cause implications for activism, including reduced entry points for earnings-driven campaigns, information advantages for well-resourced activists and complications on year-round investor outreach under Reg FD. Read More

M&A

Reuters: QXO Strikes $17 Billion Deal to Acquire Building Products Distributor and Installer TopBuild
The deal is the largest yet for QXO, which also recently acquired Kodiak Building Partners (~$2.25 billion) and Beacon Roofing Supply (~$11 billion).

CEO Brad Jacobs appeared on Bloomberg’s Odd Lots podcast and CNBC’s Money Movers to discuss the rationale for the deal, and his vision for the future of the building industry. Read More

The Wall Street Journal: Eli Lilly Strikes Deal for Cancer Biotech
Eli Lilly’s $3.25 billion acquisition of Kelonia Therapeutics, which is developing a treatment for multiple-myeloma and could wind up being a $7 billion deal if conditions are met, comes just a month after the company agreed to pay around $6.3 billion to acquire Centessa Pharmaceuticals. Read More

The New York Times: SpaceX Strikes Deal with Cursor for $60 Billion
SpaceX announced on Tuesday it had reached a unique, potential deal that will either have the rocket and satellite company acquire Cursor, an AI coding company, or pay around $10 billion as an injection of new capital. This comes as SpaceX continues to prepare for a blockbuster IPO, with Reuters reporting that the company’s IPO filing notes it will maintain “controlled company status” and informing prospective investors its board will not need independent directors in the majority. Read More

CORPORATE GOVERNANCE

Boardroom Governance: Steven Lipin: Activism, M&A, and the Rising Stakes of Board Communication
This week, GPP CEO Steve Lipin sat down with Evan Epstein of Boardroom Governance for an engaging discussion on the current state of activism and M&A. The podcast dives into timely topics related to corporate governance, crisis management and how boards are responding to the growing impact of cybersecurity and AI. Listen Here

The Verge: Tim Cook’s Departure is the Start of a New Era at Apple
After 15 years as CEO of the technology giant, Apple announced that Tim Cook will transition to executive chairman. As a part of the transition, John Ternus, Apple’s SVP of Hardware Engineering, who was long seen as the leading candidate for the job, will become CEO on September 1, 2026. Read More

Wachtell: Department of Labor Issues Guidance on Proxy Advisors
In a memo from David Katz, Lina Tetelbaum and Loren Braswell of Wachtell, they look at the recent Department of Labor guidance that proxy advisors, and potentially large asset managers, may be treated like ERISA fiduciaries. On the heels of The White House’s December 2025 Executive Order, this is the latest move by the Government to reshape advisors such as ISS and Glass Lewis. Read More

SEC’s New Tender Offer Order Draws Legal Reactions
Last week, the SEC announced an exemptive order that effectively cut the minimum tender offer period from 20 to 10 days. In a memo from Simpson Thacher, the law firm argues that the changes will be “favorable” for companies launching tender offers for M&A deals or for employee stock plans. Columbia Law professor Jeffrey Gordon goes one step further in a post on The CLS Blue Sky Blog, writing that this was issued without proper rulemaking and, in combination with Delaware merger law, could trigger a new wave of underpriced takeovers and “Saturday night specials.”

IPO

The Wall Street Journal: Cerebras Files for IPO as Demand Surges for More Efficient AI Chips
After plans to go public last year fell through, chipmaking startup Cerebras filed for an IPO, buoyed by recent deals with OpenAI and Amazon Web Services that showcase demand for efficient AI chips. Read More

Bloomberg: Blackstone-Backed Jersey Mike’s Submits Confidential IPO Filing
The Blackstone-backed sandwich chain is seeking a valuation of at least $12 billion after its relatively quick stint as a private company, expecting to raise more than $1 billion from the public listing. Read More

Inspire Brands Picks Banks as it Prepares for U.S. IPO
In other sandwich-chain news, Bloomberg reports that Inspire Brands, who owns Jimmy John’s along with fast-food chains Dunkin’ and Arby’s, has chosen JPMorgan and Bank of America as the Roark Capital-backed Holdco prepares to go public.

FROM OUR DESK TO YOURS

Chef Hiroki Odo has returned to his downtown roots with the opening of a dressed-down version of his two-Michelin-starred Flatiron namesake in the new Odo East Village (located at E 5th and Ave A). The 24-seat space translates the formal, multi-hour experience of traditional kaiseki into what the team calls “kaiseki izakaya” – a fully à la carte menu built around seasonal ingredients that blends beautiful presentation with casual ordering and shared plates: elevated dining without the ceremony.

We nibbled on a range of seasonal vegetables like kinpira (a nest of roasted burdock root) and dashi-marinated tomatoes before moving to selections from Odo’s binchotan grill. Other standouts included nikomi (braised wagyu beef tongue) and a lightly simmered uni from Hokkaido.

Japanese sake and shochu are the heart of the cocktail list, with several tasty highballs accentuated with lime and kumquat — equally delicious and refreshing. Whiskey lovers can indulge in Japanese favorites like Toki or Hibiki Harmony, best sipped slowly at the bar. All in all, a welcoming, intimate spot in the East Village serving dishes until midnight