(Deletes LLP from law firm name)
By Jessica DiNapoli
NEW YORK, April 27 (Reuters) - Former Delaware Supreme Court Chief Justice Leo Strine has joined Wachtell, Lipton, Rosen & Katz after presiding over the top U.S. business court for two decades, a high-profile appointment for a law firm that major U.S. companies often turn to for litigation, dealmaking and corporate governance advice.
Delaware is home to most publicly traded U.S. companies, making the business courts in the state the most influential in the United States. Strine retired from Delaware’s Supreme Court last fall, after spending the last five years on the bench as chief justice, making him a trophy hire for a corporate law firm.
His move to Wachtell comes at a time of upheaval in corporate America, as the economic fallout from the coronavirus outbreak forces many companies to reconsider key aspects of their strategy, from whether they should value shareholders more than employees to seeing agreed acquisitions through.
Strine has long argued for corporations to focus more on their workers. He said he will be advising clients to care about their employees and other constituencies as much as their shareholders, a principle that Wachtell founding partner Martin Lipton calls “stakeholder capitalism.”
“If we want people to have confidence in our economy and market sectors, they have to feel that sectors are treating workers with respect, respecting communities in which they operate and being environmentally responsible,” Strine said in an interview with Reuters.
“We’re suffering because of our failure to address the growing imbalances in our system.”
Last year, nearly 200 U.S. companies signed up to a Business Roundtable pledge to provide economic benefits to all, not just their shareholders.
Strine said that once people sickened by coronavirus are treated, companies should follow up on that commitment. He recommends that companies consider becoming public benefit corporations, freeing them from shareholder demands so they can think more about social and environmental sustainability.
“We need to go from rote talk to real action,” Strine said.
Another consequence of the pandemic has been corporate acquirers getting cold feet. Last week, buyout firm Sycamore Partners asked a Delaware court to bless its decision to abandon its $525 million deal for lingerie brand Victoria’s Secret, while a special committee for co-working company WeWork sued its majority shareholder, SoftBank Group, earlier this month for ditching a $3 billion tender offer.
“The courts will have an eye out for anyone who looks to be taking an unfair advantage,” Strine said, adding that the acquirers seeking to walk away from deals are often suffering in the pandemic as much as the acquisition targets.
Reporting by Jessica DiNapoli in New York; editing by Diane Craft