Editorial Advisory Board//August 17, 2015
//August 17, 2015
You can learn a lot by paying attention to the competition. That is how we came across what ought to be a golden opportunity for commerce in Maryland.
The Wall Street Journal reported earlier this month about a souring by firms on Delaware as a corporate domicile. It seems a number of companies are having second thoughts about being in the state, companies that were originally attracted to Delaware as a place of incorporation as a business-friendly state with a reputation for high-quality courts knowledgeable about the intricacies of business law, with a Bar to match.
The problems with Delaware are listed in the article, but, putting the concerns together, it may be that Delaware may be ripe for the plucking.
The Old Line State, after all, is already the third-most popular state for incorporations after Delaware and Nevada, largely on the basis of our elaborated laws for real-estate trust companies.
Now, Delaware is extremely popular and likely to remain so for the immediate future, but nothing is fixed. New Jersey, for example, once held a prominent position as a state of incorporation, as anyone who has struggled through corporate law casebooks can attest. But no longer, as Delaware snatched the crown away when New Jersey became inhospitable.
As the Journal points out, being a corporate domicile is very remunerative. Corporate fees generate $1 billion per year in Delaware and litigation generates millions of dollars of filing fees and legal fees.
As private lawyers reading this editorial are well aware, Delaware is one of the most protectionist states in the country when it comes to attorneys appearing in its courts: Delawareans first, last, and always. And good luck trying to become a member of the state Bar.
We encourage Maryland to make a concerted effort to put in place those elements that will make it truly attractive to companies that have grown a bit weary of Delaware’s actions of late. The effort must be knowledgeable, sincere, and with the support of all elements of the officeholder class.
This is not the time to be arguing about turf, especially in the Judiciary, which will be advantaged in the long-term by putting in place a specialized judicial element that will be able, day-in and day-out, to deal with the most complex business disputes and do so with the efficiency achieved by Delaware’s equity system, its esteemed Court of Chancery.
It is the time to show the businesses of America that Maryland knows what competition means. The message should be trumpeted loud and clear: Delaware, watch out!
Editorial Advisory Board members James B. Astrachan, Caroline Griffin, C. William Michaels and Gale Rasin did not participate in this opinion.
EDITORIAL ADVISORY BOARD MEMBERS
James B. Astrachan, Chair
Wesley D. Blakeslee
Arthur F. Fergenson
Daniel F. Goldstein
C. William Michaels
Tracy L. Steedman
H. Mark Stichel
Ferrier R. Stillman
The Daily Record Editorial Advisory Board is composed of members of the legal profession who serve voluntarily and are independent of The Daily Record. Through their ongoing exchange of views, members of the Board attempt to develop consensus on issues of importance to the Bench, Bar and public. When their minds meet, unsigned opinions will result. When they differ, majority views and signed rebuttals will appear. Members of the community are invited to contribute letters to the editor and/or columns about opinions expressed by the Editorial Advisory Board.S