Last week, in Rutledge v. Clearway Energy Group LLC, No. 248, 2025 (Del. Feb. 27, 2026), the Delaware Supreme Court upheld the validity of SB 21, including the provisions that provide for its retroactive application. Here’s a statement from the Delaware Governor.
You might recall that SB 21 is legislation that Delaware enacted last March – designed to counter any notion that there is a DExit wave – that amended Section 144 of the Delaware General Corporation Law to statutorily provide protections for directors, provide clearer standards for controlling stockholder transactions and limit the number of books and records demands. In other words, the amendments created a statutory “safe harbor” for conflict-of-interest transactions involving directors, officers and controlling stockholders. Afterwards, a number of lawsuits were filed to challenge the state law constitutionality of SB 21 – and the issue was certified to the Delaware Supreme Court.
The Delaware Supreme Court’s decision was a unanimous en banc ruling – and it notes that Chancery Court retains jurisdiction over fiduciary duty claims in conflicted transactions and that under the changed law, there’s a limit on available remedies if the transaction at issue complies with the safe harbor procedures.
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