The Meta Platforms leadership together with certain shareholders achieved an unexpected settlement which stopped an $8 billion court battle that could have forced CEO Mark Zuckerberg to testify and increased public examination of Delaware corporate legal procedures.
The settlement between Meta and its shareholders occurred during the second day of the Delaware Court of Chancery trial to resolve privacy-related claims against Meta leaders including Zuckerberg and Sandberg and billionaire directors Thiel and Hastings. The executives faced legal action from plaintiffs who demanded reimbursement of the $5 billion Meta paid to the FTC in 2019 for privacy violations.
The new deal remains under finalization but it brings an immediate end to the case which reduces the pressure on Delaware courts that have faced criticism from tech leaders including Elon Musk.
The state legal system faces criticism from founders and boards according to Elon Musk and other critics. The trend known as “Dexit” has led Dropbox and Roblox and Trump Media to reincorporate outside Delaware during the past year. The key venture firm Andreessen Horowitz shifted its operations to Nevada after moving from Delaware.
The Meta case created an unenviable situation for Delaware according to legal experts. The court’s decision against defendants could have encouraged more corporations to leave while a favorable ruling might have triggered accusations of judicial bias.
The high-profile settlement protects Meta’s top executives from courtroom testimony while preventing negative outcomes for the company.
