Why does this matter to the average U.S. investor? Because jurisdiction and terms of the litigation for the business-related lawsuits are often decided by the place of incorporation or the companies own by-laws. Companies like Wal-Mart, Chevron, General Motors, Ford, Dole, all opt to incorporate in Delaware to minimize the pesky lawsuits that demand investors be paid market price for their shares or just to be treated fairly.

At the expense of main street, Delaware generates a billion dollars in fees year after year with almost no oversight. There is simply no motivation for Delaware to balance shareholder rights with corporate governance rules. Instead, Delaware has actively lobbied federal officials to ensure acts like the Dodd-Frank financial overhaul didn’t tread on its state court system or its rules.  Delaware has been successful protecting its turf, and it is way past time to ensure that one state cannot single handily protect corporate America while lining its own pockets.

via Delaware has Won the Corporate Race to the Bottom: Time for an Overhaul.