WILMINGTON, Delaware (Reuters) - Delaware’s close-knit legal world is preparing to bid farewell to a quiet reserved gentleman and bracing for the likelihood the state’s prominent business court will be led by a feisty, sharp-tongued successor.
The Chancery Court, one of the most important business courts in the United States, will soon be getting a new chief judge for the first time in 14 years.
The retirement of William Chandler, 60, would clear the way for Leo Strine, the most senior of the four vice chancellors, to apply for the top spot on the five-judge court.
“Governor Markell will choose a Democrat as chancellor and there is no one more qualified than Vice Chancellor Strine,” said Stephen Lamb, who retired as a vice chancellor in 2009 and is now a partner at Paul, Weiss, Rifkind, Wharton & Garrison LLC in Wilmington.
Practitioners expect a dramatic change in style for the court’s most powerful position if Strine applies, as is widely expected, but at the same time they anticipate consistency in the court’s operations and interpretation of the law.
Strine, a former corporate litigator in Wilmington with Skadden, Arps, Slate, Meagher & Flom, referred calls about the chancellor position to the governor’s office.
The governor’s spokesman Brian Selander said: “Given that the application process hasn’t started, it’s far too early to say what the outcome would be.”
Chandler announced his retirement on Monday, ending two decades of work that included some of the biggest corporate legal disputes involving companies such as Walt Disney Co and eBay Inc.
Chandler and Strine, who is prone to making references in court to the MTV hit “Jersey Shore,” are so different it is “not even fair to compare them,” said Brian Quinn, a professor at Boston College Law School.
Yet he added: “What they bring to the court is very similar. In that sense, Delaware is not about to radically shift.”
A nominating committee posted the position on Tuesday, with applications due by May 13. The 11-member committee, made up of a mix of members of the state bar as well as business and civic leaders, will send three names to the governor. The governor will send his selection to the state senate for confirmation.
The state constitution requires bipartisan balance on the courts.
The court is widely recognized in Delaware as a key institution, helping entice more than half of the Fortune 500 companies to incorporate there. That incorporation business brings in about a quarter of the annual budget revenues in Delaware, which unlike many states does not have a sales tax.
The chancellor assigns cases and oversees court administration. Participants praised Chandler for providing electronic access to court documents during his tenure and unifying the clerks’ offices throughout the state.
However, there are long-term issues that a new chancellor might want to tackle.
There is growing tension between the Chancery Court and the Delaware Supreme Court. The higher court overturned one of Chandler’s final opinions in which the outgoing judge sided with shareholders and hostile suitor Air Products & Chemicals Inc against the management of Airgas Inc.
Chandler eventually came down on the side of management, deciding the Airgas board could use a “poison pill” defense and noted he was constrained by Supreme Court precedent.
Strine, born in 1964, has shown his willingness to suggest changes to a higher court he disagrees with.
In a 2005 opinion involving Cox Communications he laid out his own proposals to resolve what he called the “odd and unsatisfying rationale” applied by the state Supreme Court in reviewing mergers involving controlling shareholders.
“I have a sense that the Chancery Court is due to re-examine shareholder activism and corporate boards and push up against the Supreme Court,” said Jill Fisch, a professor at the University of Pennsylvania Law School.
She said Delaware courts have traditionally deferred to management, but the issue might be reaching a “tipping point in terms of whether the discretion should continue to increase.”
Like his colleagues on the bench, Strine regularly appears at conferences and writes academic papers. He has called the head of the U.S. Securities and Exchange Commission to discuss proposed rules on shareholder nominations for corporate boards, according to an agency disclosure.
He recently raised eyebrows at a law conference at Tulane University by describing the lawyers who defended Airgas as “Airgasmic” after they successfully fended off the hostile bid.
J. Robert Brown, a professor at the Sturm College of Law in Denver questioned if such an active role suits the public face of the court.
“He’s very involved in the corporate governance debate,” Brown said. “And maybe what some want is someone more reserved and a little bit more stepped back from that.”
Reporting by Tom Hals; and Andre Grenon