Just as courtroom tensions were set to rise in Delaware’s Chancery Court, a dramatic turn of events brought an abrupt end to what could have been a landmark \$8 billion trial. On Day Two of an eight-day schedule, Meta Platforms’ shareholders and the company’s elite leadership—including Mark Zuckerberg—struck a surprise settlement, effectively saving the tech titan from testifying about Facebook’s historic privacy failures.
The case, built around allegations that Meta’s directors failed to safeguard user data, was poised to thrust Delaware’s judiciary back into the spotlight—this time under a microscope sharpened by tech tycoons and political backlash. The fallout of the trial had stakes far beyond Meta; it threatened to accelerate the so-called “Dexit,” a growing corporate rebellion against Delaware’s legal dominance.
The case named eleven heavyweights—Zuckerberg, Sheryl Sandberg, Marc Andreessen, Peter Thiel, Reed Hastings—accusing them of allowing user data violations that led to costly settlements, including Facebook’s eye-watering \$5 billion payout to the FTC in 2019. Shareholders wanted these insiders to dip into their own fortunes to repay Meta for the legal mess.
But the sudden truce took the heat off everyone involved. It sidestepped the looming judicial tightrope: rule against the directors and invite mass corporate defection; rule in their favor and confirm suspicions of elite favoritism. Delaware’s Court of Chancery was spared the burden of choosing between two political firestorms.
For Delaware itself, the timing couldn’t have been more critical. Once the gold standard for incorporation, the state has recently watched companies like Dropbox, Roblox, and Trump Media head for the exits—egged on by Elon Musk’s anti-Delaware crusade. Andreessen Horowitz even pulled its registration from the state this month, citing an anti-founder bias and referencing Chancellor Kathaleen McCormick’s now-infamous nullification of Musk’s \$56 billion Tesla pay deal.
Meta’s case added fresh fuel to the bonfire. It forced Delaware lawmakers into emergency mode earlier this year, meeting with Meta brass and pushing through swift legal amendments designed to shield controlling shareholders—namely, Zuckerberg—from increased litigation. Still, skepticism lingered. Affirm Holdings, for instance, left Delaware anyway, arguing the new protections were too vague to be trusted.
The Meta deal, details of which remain under wraps, may give Delaware courts a breather—but the pressure isn’t over. Corporate America is still watching closely, and so are critics who believe the state is choosing powerful founders over shareholder rights.
Yet, voices like Lawrence Cunningham of the Weinberg Center argue Delaware did what it does best—shepherd a volatile, high-profile legal standoff to resolution without letting it spiral. “It was a very desired judicial outcome,” he remarked.
Translation: Delaware lives to charter another day. But for how long?
