Delaware courts reserve their entire fairness standard of review – the state’s “most onerous standard” – for, among others, cases involving conflicted controllers.[1] In recent years, there is a view that the standard’s application (or at least the procedural cleansing required to shift the standard of review to business judgment when entire fairness is invoked) has crept to cover situations it was never intended to cover.[2]  As a result, there is growing anxiety that corporations will follow Tesla’s lead and flee the First State for greener (well, typically drier and hotter) pastures.[3]  Indeed, part of the rationale for passing SB21, the Delaware legislation that recently revamped the state’s corporation law, rested, in part, on this premise.[4]

This is not a new fear; Delaware has faced existential (and exit) crises before.  After the Delaware Supreme Court’s decision in Smith v. Van Gorkom, the state legislature quickly adopted Section 102(b)(7) to eliminate personal liability for directors for duty of care violations.[5]  No less of a corporate law luminary than Martin Lipton suggested corporations should incorporate outside of Delaware[6] after the one-two punch from the Court of Chancery in Interco[7] and Pillsbury[8] (subsequently curtailed by the Delaware Supreme Court in Paramount Communications, Inc. v. Time Inc.,[9] perhaps in no small part because after Interco “Marty roared”).[10]

These exit crises raise a common, though empirically difficult, question: How much does Delaware law (or changes or clarifications in Delaware law) affect the decision to incorporate inside or outside Delaware?  One framework suggests that the threat of exit leads to a “race for the bottom” (of which Delaware is the winner), forcing states to, over time, adopt increasingly manager-friendly corporate law.[11]  Though some scholars have pushed back on the race to the bottom theory, suggesting instead that Delaware’s status as corporate law mecca exists due to other factors, such as its court system, the threat of federal intervention, or network effects.[12]  Unfortunately, the debate for the most part has been highly theoretical.[13]

But in a recent paper, Jens Frankenreiter empirically tests whether changes in Delaware law cause exit and finds that the Delaware legislature’s “move to ban fee-shifting bylaws [in 2015] has had, at best, a very limited effect on incorporation decisions.”[14]  Frankenreiter’s analysis is interesting and sheds light on that perennial issue. But his analysis focuses on an event that restricts a Delaware corporation’s ability to do something (i.e., provide for fee-shifting in a corporation’s articles of incorporation) rather than one that changes the standard of review under which a corporation’s actions will be judged.  He looks at existing corporations and ones that recently went public to suggest that the ban on fee-shifting had little or no effect on incorporation decisions.[15]  Of course, the circumstance he investigates – a restriction on corporate flexibility instead of changes in fiduciary standards of review – may make analogies to the recent debate about SB21 less useful.

Frankenreiter’s timely contribution inspired a different approach.  Just a few years ago, we were in the midst of a SPAC craze.  SPACs (Special Purchase Acquisition Companies) are publicly traded companies that raise capital for one purpose: to merge with another (typically private) company and take it public.  “Unlike most companies that go public, a SPAC has no operations and its assets are effectively limited to its IPO proceeds.”[16]  Typically, SPACs are formed by sophisticated individuals or private equity firms (often referred to as SPAC “sponsors”) whose sole goal “is to identify a target for a ‘de-SPAC’ merger” before the end of the completion window (typically around 24 months).[17] To encourage sponsors to complete a de-SPAC, sponsors typically receive “a ‘promote’ of 20% of the SPAC’s post-IPO shares.”[18]  But if a de-SPAC is not completed within the completion window, then the IPO proceeds are returned to investors, and the sponsors’ promote is worth nothing.[19]

In 2020 and 2021, the popularity of SPACs exploded, raising over $250 billion in capital[20] and completing some of the largest acquisitions during those years, including Altimeter Growth Corporation’s merger with Grab Holdings, Southeast Asia’s largest food delivery app,[21] and Soaring Eagle Acquisition Corporation’s merger with Ginkgo Bioworks, a large synthetic biology company focused on programming cells like computers.[22]  By 2022, a mix of accounting scandals at certain de-SPACed companies,[23] regulatory scrutiny from the SEC,[24] and a general market correction due in part to inflation concerns[25] slowed the SPAC-craze, but at the height of their popularity, the Delaware Court of Chancery, in In re Multiplan, held that SPAC transactions are, generally, subject to the entire fairness standard of review.[26]  This decision could have prompted SPACs to leave Delaware for less onerous jurisdictions. Indeed, at least one law firm suggested as much in a memo published shortly after the Multiplan decision.[27]  Before the decision, Delaware captured the majority of SPAC incorporations, competing most fiercely with the Cayman Islands for this business.  For instance, in 2021, 582 SPACs that IPOed filed S-1 registration statements.  Of those, 322 (55.3 percent) were Delaware corporations, 251 (43.1 percent) were Cayman entities, and nine (1.6 percent) were incorporated in the British Virgin Islands or Bermuda.[28]

The Multiplan decision, therefore, offers a compelling natural experiment: Did SPACs leave Delaware when it became clear that their de-SPAC transaction would likely be subject to the entire fairness standard of review?  SPACs, in some ways, are a unique vehicle through which to test this hypothesis because these entities are (i) typically formed solely to be registered as SPACs and (ii) the SPAC sponsors are generally sophisticated capital-markets participants advised by sophisticated counsel.  That is, SPAC-incorporation decisions involved low transaction costs (or, at least, have relatively lower transaction costs than non-SPAC IPOs when it comes to incorporation decisions).

Unfortunately for an empirical investigation, things get a bit complicated after the Multiplan decision.  Multiplan was decided on January 3, 2022.  But, just over seven months later, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022, which at the last minute[29] added a 1 percent excise tax on domestic-company stock buybacks.[30]  Due to the broad construction of the excise tax, practitioners quickly realized that this tax could be applied to domestic SPACs.[31]  In particular, the excise tax could affect both deSPAC transactions (by taxing the redemption for SPAC stockholders who choose to redeem instead of receiving equity in the pro forma company) and SPAC liquidations (by taxing the return of capital to SPAC investors).  The potential excise tax on both “end of life” SPAC transactions represented an existential threat to SPACs, and their sponsors responded accordingly.[32]  Although the IRS put out guidance that was helpful to SPACs by the end of 2022, uncertainty remained, [33] and SPACs fled the United States for the Cayman Islands.  In 2023, 22 SPACs that IPOed filed S-1 registration statements, but only four (18.2 percent) were Delaware corporations.  By 2024, of the 60 SPACs that IPOed that filed S-1 registration statements, none were Delaware corporations, and only one was incorporated in a U.S. state (Nevada).

The Inflation Reduction Act’s passage roughly seven months after the Multiplan decision likely contributed to pushing SPACs out of the United States (and, therefore, Delaware).  But the data show that, between January 4, 2022 and August 16, 2022 (the “Test Period”), that is before the Inflation Reduction Act was signed but, crucially, after the Multiplan decision, Delaware’s share of SPAC incorporations that IPOed actually increased (albeit modestly).[34]

Contrary to what could have been expected (and was expected by at least one law firm),[35] it does not appear that the Multiplan decision affected a SPAC sponsor’s incorporation decision.  Recall that SPACs are formed shortly before they go public and solely for the purpose of merging into another entity and thereby taking it public, such that changing the incorporation jurisdiction could be done quickly and relatively easily by a SPAC sponsor (especially since an alternative – incorporation in the Cayman Islands – had already garnered a significant portion of SPAC incorporations when Multiplan was decided).  But an exodus from Delaware did not occur – and apparently not because of a lag in sponsors realizing Multiplan’s implications.  When the sample is limited to just the second half of the Test Period (from April 26, 2022 to August 15, 2022), Delaware corporations represent 71.4 percent of IPOed SPACs that registered during that period.[36]  These results hold even if the Test Period window is shifted by a month after the Multiplan decision (to include the first month after the passage of the Inflation Reduction Act).[37]

Of course, this is far from empirically robust in the typical sense of the word.  Admittedly, the overall number of newly formed SPACs dropped precipitously from 2021 to 2022 due to a host of factors.  With so many potentially confounding variables, it is difficult to draw strong conclusions.  But these data do offer insight into how a relatively sophisticated portion of the market – SPAC sponsors – reacted to likely being subject to Delaware’s entire fairness standard of review.  At least where SPACs are concerned, an initial review of the data does not suggest that subjecting transactions to the entire fairness standard produces a quick exit from Delaware.

That is not to say that recent fears about DExit do not have merit.  Different corporate managers will respond differently to changes in law.  But the SPAC analogy offers more data to the debate over whether changes in state law affect incorporation decisions.  At least for SPACs, the data suggest it did not make a difference.

This post comes to us from Kirby Smith, chief operating officer and general counsel of Bridgeport Partners. The views expressed herein are his own and do not represent the views of Bridgeport Management Company, LLC, its affiliates, or its investment vehicles. 

ENDNOTES

[1] Frederick Hsu Living Trust v. ODN Holding Corp., 2017 WL 1437308 *26 (Del. Ch. Apr. 14, 2017).

[2] See, e.g., Lawrence A. Hamermesh, Jack B. Jacobs & Leo E. Strine, Jr., Optimizing the World’s Leading Corporate Law:  A Twenty-Year Retrospective and Look Ahead 77 Bus. Law. 321, 325 (2022).

[3] See, e.g., Michael Maugans, Analysis: DExit Pits Chancery Against Controlling Shareholders (Bloomberg Law, Feb. 20, 2025), available at https://news.bloomberglaw.com/bloomberg-law-analysis/analysis-dexit-pits-chancery-against-controlling-stockholders (noting that DExit, “the exodus from Delaware of several large companies with controlling stockholders,” “is threatening to upend the status quo for corporate law.”).

[4] See generally Thirty Years Later – Why Corporations Continue to Choose Delaware:  General Perspectives and Thoughts on Proposed Amendments (Morris Nichols Arsht & Tunnel, 2025), available at https://www.morrisnichols.com/assets/htmldocuments/ClientAlerts/ReferenceDocs/Morris%20Nichols%20Memo%20-%202025%20Proposed%20DGCL%20Amendments.pdf

[5] Stephen M. Bainbridge, Smith v. Van Gorkom *26 (UCLA School of Law & Economics Research Paper Series, Research Paper No. 08-13, May 12, 2008), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1130972 (“After Smith v. Van Gorkom, D&O liability insurance became very hard to get. Delaware responded to this purported crisis by adopting §102(b)(7) of the General Corporation Law.”).

[6] Martin Lipton, Memo: You Can’t Just Say No in Delaware No More (Dec. 17, 1988), available at https://theliptonarchive.org/wp-content/uploads/346-You-Cant-Just-Say-No-in-Delaware-No-More-dated-December-17-1988.pdf (“Unless Delaware acts quickly to correct the Pillsbury decision, the only avenues open to the half of major American companies incorporated in Delaware will be . . . leaving Delaware for a more hospitable state of incorporation.”)

[7] See City Cap. Assocs. Ltd. P’ship v. Interco Inc., 551 A.2d 787, 789 (Del. Ch. 1988).

[8] See Grand Metro. Pub. Ltd. v. Pillsbury Co., 558 A.2d 1049 (Del. Ch. 1988).

[9] 571 A.2d 1140, 1153 (Del. 1989) (rejecting the plaintiff’s position as “a fundamental misconception of our standard of review under Unocalprincipally because it would involve the court in substituting its judgment as to what is a ‘better’ deal for that of a corporation’s board of directors” and rejecting the Court of Chancery’s approach in Interco).

[10] Leo E. Strine, Jr., The Story of Blasius Industries v. Atlas Corp.: Keeping the Electoral Path Clear in J. M. Ramseyer, Corporate Law Stories, 275 (2009).

[11] See generally William L. Cary, Federalism and Corporate Law: Reflections Upon Delaware, 83 Yale L. J. 663 (1974).

[12] See generally Mark J. Roe, Delaware’s Competition, 117 Harv. L. Rev. 588 (2003); Michael Klausner, Corporations, Corporate Law, and Networks of Contracts, 81 Va. L. Rev. 757 (1995); Lucian Arye Bebchuk and Assaf Hamdani, Vigorous Race or Leisurely Walk: Reconsidering the Competition over Corporate Charters, 112 Yale L. J. 553 (2002); Marcel Kahan and Ehud Kamar, The Myth of State Competition in Corporate Law, 55 Stanford L. Rev. 679 (2002).

[13] Jens Frankenreiter, What the Past Can Teach Us About SB 21 and the Threat of Corporate Exodus (Columbia Blue Sky Blog, Mar. 12, 2025), available at https://clsbluesky.law.columbia.edu/2025/03/12/what-the-past-can-teach-us-about-sb-21-and-the-threat-of-corporate-exodus/ (noting that “most of the existing literature [on the law’s effect on incorporation decisions] is theoretical in nature”).

[14] Jens Frankenreiter, The Other Delaware Effect *19 (WashU Law Legal Studies Research Paper Series, Paper No 25-03-11, Mar. 2025), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5115285.

[15] Id. at *15-24.

[16] In re Multiplan Corp. S’holder Litig., 268 A.3d 784, 793 (Del. Ch. 2022).

[17] Id.

[18] Michael Klausner, Michael Ohlrogge & Emily Ruan, A Sober Look at SPACs, 39 Yale J. Reg. 228, 232 (2022).

[19] In re Multiplan Corp. S’holder Litig., 268 A.3d at 794 (“If no transaction was completed by then, [the SPAC sponsor] would return the IPO proceeds plus interest to its stockholders, cease operations, and wind up. In this scenario, both the [SPAC sponsor’s] Class B shares and Private Placement Warrants would expire worthless.”).  See also Klausner, Ohlrogee & Ruan, supra note 18 at 247 (“The promote also creates two dysfunctional incentives for sponsors. First, at the outset, it makes creating a SPAC very attractive, regardless of whether a sponsor has realistic prospects for negotiating a winning merger. . . . Second, having created a SPAC, a sponsor’s incentive to merge is overwhelming. If it fails to merge, the SPAC must liquidate in which case the sponsor will get nothing and will lose its initial investment. The sponsor would prefer a deal in which the SPAC shareholders do well, but it will favor a deal that is bad for shareholders over no deal at all.”).

[20] See Ken Shimokawa, SPAC and Equity Issuance Finish 2021 with Strong Momentum (S&P Global, Feb 3, 2022), available at https://www.spglobal.com/market-intelligence/en/news-insights/research/spac-and-equity-issuance-finish-2021-with-strong-momentum.

[21] Grab to Trade on Nasdaq Following Successful Business Combination with Altimeter (Dec. 1, 2021), available at https://www.businesswire.com/news/home/20211201006128/en/Grab-to-Trade-on-Nasdaq-Following-Successful-Business-Combination-with-Altimeter.

[22] Brian Gormley, Ginkgo Bioworks Goes Public After Closing SPAC Merger (Wall St. J., Sept. 17, 2021), available at https://www.wsj.com/articles/ginkgo-bioworks-goes-public-after-closing-spac-merger-11631922847.

[23] For instance, in December 2021, Nikola Corporation, which went public via a SPAC merger, “settl[ed] charges [with the SEC] that it defrauded investors by misleading them about its products, technical advancements, and commercial prospects” for $125 million.  Nikola Corporation to Pay $125 Million to Resolve Fraud Charges (Securities and Exchange Commission, Dec. 21, 2021), available at https://www.sec.gov/newsroom/press-releases/2021-267.  The settlement came after Nikola’s CEO, Trevor Milton, was criminally charged with securities fraud in July 2021.  See Former Nikola Corporation CEO Trevor Milton Charged in Securities Fraud Scheme (Dep’t of Justice, July 29, 2021), available at https://www.justice.gov/usao-sdny/pr/former-nikola-corporation-ceo-trevor-milton-charged-securities-fraud-scheme.

[24] For example, in a December 2021 speech, then-SEC Chairman Gary Gensler called on the SEC to develop SPAC-specific rules around disclosure, marketing practices, and gatekeeper obligations.  Gary Gensler, Chair, SEC, Remarks Before the Healthy Markets Association Conference (Dec. 9, 2021), available at https://www.sec.gov/newsroom/speeches-statements/gensler-healthy-markets-association-conference-120921 (“Thus, to reduce the potential for such information asymmetries, conflicts, and fraud, I’ve asked staff for proposals for the Commission’s consideration around how to better align the legal treatment of SPACs and their participants with the investor protections provided in other IPOs, with respect to disclosure, marketing practices, and gatekeeper obligations.”).

[25] Inflation began to increase in mid-2021 and continued rising throughout 2021 and into early 2022.  And although the S&P 500 Index gained ~10 percent in the second half of 2021, it closed down by about 19 percent for 2022.

[26] In re Multiplan Corp. S’holder Litig. 268 A.3d at 812 (holding that “[t]he potential conflict between [the SPAC sponsor] and public stockholders resulting from their different incentives in a bad deal versus no deal is sufficient to pass the ‘reasonably conceivable’ threshold” and “[e]ntire fairness is therefore the applicable standard of review”); see also id. (rejecting defendant’s argument “that the Sponsor’s promote (in the form of founder shares) cannot trigger entire fairness because this ‘structural feature’ would appear in ‘any de-SPAC transaction’”); John Hardiman et. al., Sullivan & Cromwell Discusses Delaware Chancery’s First Fiduciary-Duty Opinion on SPACs (Columbia Blue Sky Blog, Feb. 3, 2022), available at https://clsbluesky.law.columbia.edu/2022/02/03/sullivan-cromwell-discusses-delaware-chancerys-first-fiduciary-duty-opinion-on-spacs/ (noting that in Multiplan “the Court held that the entire fairness standard of review would apply to assess the sponsor’s and board’s conduct because the SPAC’s structure created a ‘misalignment of interests’” and observing that “[t]he structure at issue was fairly typical”).

[27] John A. Kupiec, et. al., Delaware Chancery Court Allows SPAC Merger Challenge to Proceed (Cleary Gottlieb, Jan. 5, 2022), available at https://www.clearygottlieb.com/-/media/files/alert-memos-2022/delaware-chancery-court-allows-spac-merger-challenge-to-proceed-v-2.pdf (observing that “[m]any recent SPACs have been organized in jurisdictions outside of Delaware” and “[t]he Multiplan decision may reinforce that trend”).

[28] Delaware’s incorporation market share among SPACs was down in 2021 from 2020 levels when 321 SPACs filed S-1 registrations, of which 191 (59.5 percent) were Delaware corporations, 124 (38.6 percent) were incorporated in the Cayman Islands, and the remaining six (1.9 percent) were incorporated in either Nevada or the British Virgin Islands.  For the sake of clarity, these data were compiled based on data from StockAnalysis.com.  All IPOs in their database for the years 2019 to the present were collected, with the flag “Is SPAC” included in the dataset (n = 2,400).  After pulling in all the IPOs from the StockAnalysis.com data set, I extracted the IPOs that were either (i) labeled as SPACs; or (ii) had an IPO price of $10.00, because that is the typical IPO price for a SPAC (n = 1,145).  Klausner, Ohlrogee & Ruan, supra note 18 at 236 (“By convention, SPACs set prices of units at $10.00.”).  After that culling, I manually collected the Form S-1 for each IPO from the SEC’s EDGAR database and extracted (i) the date the S-1 was filed publicly; (ii) the SPAC’s jurisdiction of incorporation; and (iii) the proposed offering size.  During this process, I confirmed that each entity was, in fact, a SPAC (and removed any entities that were not SPACs, resulting in a total data set of 1,100 observations).  I used the date of the first S-1 registration filing instead of the date of earlier confidential filings because (i) some issuers may not file confidentially; and (ii) issuers can withdrawal confidential filings before they are public.  See Bill Hughes et. al., IPO Insights:  Tips for Successful SEC Staff Review of Your IPO (Orrick Oct. 2, 2023), available at https://www.orrick.com/en/Insights/2018/06/Tips-for-Successful-SEC-Staff-Review-of-Your-IPO (“[Draft Registration Statements] will ultimately be available for public review once you flip public.  If you decide not to proceed with your IPO, you may retract your DRS to preserve confidentiality by submitting a letter to the Staff requesting to do so.”).  An important limitation of this data is that the data set from StockAnalysis.com will capture only SPACs that went public, not SPACs that filed an S-1 registration statement but ultimately withdrew the registration statement and did not go public.  Admittedly, this may bias the data either in the direction of Delaware (as SPACs that were able to IPO during the Test Period could have been more likely to be Delaware SPACs since investors may have been more likely to subscribe to a Delaware SPAC with the added protection afforded by Multiplan) or the Cayman Islands (as, after Multiplan SPAC sponsors could have pulled more Delaware SPACs compared to Cayman Island SPACs).  In future research, I plan to capture all SPAC registration statements but believe as an initial matter, this data is informative of Multiplan’s possible effect.

[29] Tim Shaw, The Long Read:  Excise on Stock Buybacks Draws Mixed Response (Thomson Reuters, Aug. 12, 2022), available at https://tax.thomsonreuters.com/news/the-long-read-excise-on-stock-buybacks-draws-mixed-response/#:~:text=A%20last%2Dminute%20modification%20to,of%20consensus%20among%20tax%20experts. (observing that the tax on corporate stock repurchases was “[a] last-minute modification to the Inflation Reduction Act of 2022”).

[30] The excise tax applies to every “covered corporation,” which “means any domestic corporation the stock of which is traded on an established securities market (within the meaning of section 7704(b)(1)).  IRC § 4501(a); (b).  But the excise tax also applies to stock acquisitions “of a covered corporation by specified affiliates of such covered corporation,” which could include foreign corporations but are unlikely to include SPACs.  IRC § 4501(c)(2).  New 1% Excise Tax on Stock Repurchases by Publicly Traded Corporations (Sidley, Aug. 15, 2022), available at https://www.sidley.com/en/insights/newsupdates/2022/08/new-1-percent-excise-tax-on-stock-repurchases-by-publicly-traded-corporations (“The Excise Tax would apply to any redemption of stock over the course of the life of a special purpose acquisition company (“SPAC”) that is a covered corporation (i.e., a Delaware SPAC as opposed to a Cayman SPAC).”).

[31] See, e.g., Analysis:  Impact of Inflation Reduction Act’s Stock Buyback Excise Tax and Corporate Minimum Tax (Latham & Watkins, Aug. 19, 2022), available at https://www.lw.com/admin/upload/SiteAttachments/Alert%203001.pdf (“Absent any favorable future guidance, it appears that a SPAC redemption event in connection with its liquidation could be treated as a repurchase for purposes of the excise tax”); New 1% Excise Tax on Stock Repurchases by Publicly Traded Corporations (Sidley, Aug. 15, 2022), available at https://www.sidley.com/en/insights/newsupdates/2022/08/new-1-percent-excise-tax-on-stock-repurchases-by-publicly-traded-corporations (“The Excise Tax would apply to any redemption of stock over the course of the life of a special purpose acquisition company (“SPAC”) that is a covered corporation (i.e., a Delaware SPAC as opposed to a Cayman SPAC), including in connection with its initial business combination or “de-SPAC” transaction, even though redeeming shareholders are generally recouping their original economic investment without any real economic gain.”)

[32] See IRS Guidance Answers Certain Questions for SPACs on Applicability of Excise Tax, but Some Uncertainty Remains (Ropes & Gray, Jan. 5, 2023), available at https://www.ropesgray.com/en/insights/alerts/2023/01/irs-guidance-answers-certain-questions-for-spacs-on-applicability-of-excise-tax (“In reaction [to the Inflation Reduction Act], many SPACs whose term would have expired in early 2023 opted to accelerate their liquidation into 2022, or opted to seek an extension during 2022 so that the redemptions associated with the extension process would occur during 2022.”)

[33] Id. (noting that “open questions remain regarding the treatment of other repurchases by a SPAC”).

[34] In an attempt to isolate Multiplan’s effect on SPAC incorporation decisions, the data are cut for two time periods throughout its life:  (i) January 4 (the day after the Multiplan decision in 2022) through August 15 (the day before the Inflation Reduction Act was signed into law in 2022); and (ii) August 16 through to January 3 of the following year.  Using conventional first and second halves of the year (that is, using June 30 as the cut-off), produces similar results.  In the second half of 2021, 187 SPACs that IPOed filed S-1 registration statements, of which 96 (51.3 percent) were Delaware corporations, 88 (47.1 percent) were incorporated in the Cayman Islands, and 3 (1.6 percent) were incorporated in the British Virgin Islands or Bermuda, compared with the first half of 2022 in which 37 SPACs that IPOed filed S-1 registration statements, of which 21 (56.8 percent) were Delaware corporations, 15 (40.5 percent) were incorporated in the Cayman Islands, and 1 (2.7 percent) was incorporated in the British Virgin Islands.

[35] Kupiec, supra note 27.

[36] From April 26, 2022 to August 15, 2022, 14 SPACs that IPOed filed S-1 registration statements, of which 10 were Delaware corporations, three were incorporated in the Cayman Islands, and one was incorporated in the British Virgin Islands.

[37] If the window is shifted to start 30 days after the Multiplan decision (i.e., to start on February 3 and conclude on September 14), Delaware’s share of SPAC incorporations also increases.  For the period beginning on September 15, 2021 and ending on February 3, 2022, 132 SPACs that IPOed filed S-1 registration statements, of which 57 (43.2 percent) were incorporated in Delaware, 73 (55.3 percent) were incorporated in the Cayman Islands, and 2 (1.5 percent) were incorporated in the British Virgin Islands or Bermuda, compared with the period beginning on February 4, 2022 and ending on September 14, 2022, there were 32 SPACs that IPOed that filed S-1 registration statements, of which 18 (56.3 percent) were incorporated in Delaware, 11 (34.4 percent) were incorporated in the Cayman Islands, and 3 (9.4 percent) were incorporated elsewhere (the British Virgin Islands and Massachusetts).  Notably, if the window is shifted to start one month before the Multiplan decision, Delaware’s share of SPAC incorporations does decline, albeit modestly, by two percent, but a shift before the Multiplan decision would imply that sponsors anticipated Multiplan’s decision and responded preemptively, which seems unlikely.  In any event, the change is modest: for the period beginning July 17, 2021 and ending December 5, 2021, 158 SPACs that IPOed filed S-1 registration statements, of which 82 (51.9 percent) were incorporated in Delaware, 73 (46.2 percent) were incorporated in the Cayman Islands, and three (1.9 percent) were incorporated in the British Virgin Islands or Bermuda, compared with the period beginning December 6, 2021 and ending on July 16, 2021, 55 SPACs that IPOed filed S-1 registration statements, of which 27 (49.1 percent) were incorporated in Delaware, 27 (49.1 percent) were incorporated in the Cayman Islands, and one (1.8 percent) was incorporated in the British Virgin Islands.