Our recent Client Alert discusses the highly anticipated ruling on December 19, 2025, by the Delaware Supreme Court reversing the Court of Chancery’s rescission of Elon Musk’s 2018 equity compensation package. The per curiam opinion focused on the remedy rather than liability, holding that rescission was an “improper remedy” given the inability to restore the status quo. The Delaware Supreme Court awarded nominal damages of $1 and adopted Tesla’s proposed quantum meruit approach for attorneys’ fees—lowering the fee award from $345 million to approximately $54.5 million.

The last two years have involved a remarkable debate around fundamentals of corporate law, including the appropriate balance of power and obligations among boards, founders and other large stockholders, and investors, as well as the optimal state of incorporation for companies. The Delaware Supreme Court’s opinion in this case was measured in its analysis and significant in its result. Other upcoming cases from the Delaware Supreme Court, and undoubtedly other developments, will continue to shape the ongoing debate.