Texas is throwing down a legal challenge to Delaware

The Lone Star State, 40 years later, is now ready to flip that script. The Texas governor last year signed legislation to create the Texas Business Court to hear commercial cases worth more than $5mn or $10mn, depending on the type of dispute. Specialised state and federal courts are not unusual in the US. But in business matters, Delaware and New York state law remain pre-eminent. Texas advocates, however, believe they can not only build from scratch a court to challenge the incumbents, but that it is a worthy use of their resources to do so.

Since the pandemic especially, Texas has seen a significant influx of big companies moving either their headquarters or major operations to the state driven by what is perceived as a welcoming environment: low taxes, cheap worker housing and minimal regulation. In particular, Wall Street banks and investment firms have migrated to Texas, making it a surprising finance hub.

“The new court sets Texas apart from others and I believe will draw even more business to the state, says Christina Sautter, a law professor at Southern Methodist University.

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