Rick Horvath is a partner at Dechert LLP based in San Francisco. He focuses his practice on corporate governance matters. We explore recent developments in Delaware law, with particular attention to SB21, which introduces significant changes related to controlling shareholder transactions and stockholder information rights. Rick provides historical context, explains the evolving landscape of corporate governance, and offers insights into how the legislation may impact directors, shareholders, and future governance practices. If you enjoy this episode, please consider subscribing, leaving a review, or sharing this podcast on social media. You can also support the podcast by subscribing to the Boardroom Governance Newsletter at evanepstein.substack.com. This podcast is sponsored by the American College of Governance Counsel.
(0:00) Intro
(1:14) About the podcast sponsor: The American College of Governance Counsel
(2:01) Start of interview
(4:38) His professional background starting with Skadden in Delaware.
(5:08) About his corporate governance practice at Dechert LLP
(8:10) How Delaware Came to Dominate U.S. Incorporations
(13:14) What prompted the pushback against Delaware
(15:12) The Tornetta v Musk decision (Elon Musk CEO compensation rescission)
(18:40) The Rationale Behind the Governor and Legislature’s Support for SB21 in Delaware.
(22:38) Changes to Controlled Stockholder Transactions and the Definition of a Controller (Safe Harbor Provision under Section 144)
(24:18) Doctrine of Transaction-Specific Control (reference to paper by Pollman and Will, 2025)
(26:06) Explaining the MFW Doctrine, a Delaware law concept that provides a pathway to business judgment review for transactions involving a controlling stockholder, instead of the more rigorous "entire fairness" review (pre SB-21). "The view had become the MFW doctrine was creating both litigation risk and deal uncertainty."
(30:45) Changes to Section 220 Shareholder Inspection Rights by SB21.
(34:04) Will SB21 stem the tide of reincorporations? "I think it is enabling companies that had been looking at moves to pause"
(37:00) Competing States: Nevada and Texas
(40:17) Revisiting Caremark claims (directors' oversight duties). Legal risks vs business risks.
(44:50) Book that has greatly influenced his life: Hagakure (early 1700s, Japan)
(45:47) His mentors:
(46:58) Quotes that he thinks of often or lives his life by.
(47:52) An unusual habit or an absurd thing that he loves.
(49:11) The living person he most admires: former Delaware Chancellor William B. Chandler, III.
Rick Horvath is a partner at Dechert LLP in San Francisco and focuses his practice on corporate governance matters.