Author: Kelly McElroy

Why Texas Is Becoming a Serious Rival to Delaware

Posted on by Kelly McElroy

For nearly a century, “incorporate in Delaware” has been the reflexive advice given to American businesses, from Main Street startups to Fortune 500 giants. Delaware earned that position by having a specialized business court in the Court of Chancery, a deep bench of judges who do nothing but corporate law and a legislature that historically has moved quickly to keep its statutes current and business friendly.

Texas has spent the past three years assembling its own version of all three advantages, and the pace has accelerated considerably in recent months. Texas has created a specialized business court, passed a wave of corporate-governance legislation aimed squarely at companies deciding where to incorporate and, as of this month, began live trading on its own national stock exchange. These developments deserve to be examined together, because none of them happened by accident.

A Court Built to Generate Precedent

The Texas Legislature created the Texas Business Court in 2023 through House Bill 19, and the court began accepting cases on September 1, 2024.[1] Its judges are appointed rather than elected, and each must have at least ten years of experience in complex business litigation, business transactional work or prior service as a civil judge in Texas. Two design choices reveal the Legislature’s ambition. First, the Business Court issues written opinions, a departure from ordinary Texas trial-court practice and the mechanism by which Texas intends to build the kind of searchable, predictable body of corporate case law that took Delaware decades to accumulate. Second, appeals are channeled to a purpose-built appellate court, the Fifteenth Court of Appeals, which holds exclusive jurisdiction over appeals from the Business Court.[2] The structure deliberately echoes the relationship between Delaware’s Court of Chancery and the Delaware Supreme Court.

The Legislature has continued to invest in the project. House Bill 40, effective September 1, 2025, cut the amount-in-controversy threshold for a broad category of commercial disputes from $10 million to $5 million and extended the court’s jurisdiction to intellectual property, trade-secret and arbitration-related disputes.[3] A meaningful share of ordinary commercial disputes involving Texas parties now falls within its reach.

 

Statutes Written for the Boardroom

The second front is statutory. Senate Bill 29, enacted in May 2025, rewrote significant portions of Texas corporate law with an unmistakable audience in mind: boards and general counsel comparing Texas against Delaware. Among other changes, the legislation codified the business judgment rule, raised procedural hurdles for shareholder derivative litigation and expressly authorized corporations to adopt jury-trial waivers and forum-selection provisions in their governing documents, including provisions channeling internal disputes into the Business Court.[4] The statute has already been tested. Earlier this year, a federal court in the Northern District of Texas relied on S.B. 29 in dismissing a shareholder derivative suit and rejected the plaintiff’s argument that the statute was unconstitutional.[5]

Texas voters did their part as well. In November 2025, they approved a constitutional amendment prohibiting the Legislature from imposing an occupation tax on securities market operators or any tax on securities transactions.[6] On its face, a technical tax provision. In context, a promise of long-term fiscal certainty to exactly the kind of institution Texas was about to bring online.

 

The Texas Stock Exchange

That institution is the Texas Stock Exchange (“TXSE”). The SEC approved TXSE’s Form 1 registration as a national securities exchange on September 30, 2025, making it the first fully integrated national exchange approved in decades, and the exchange began live trading in Dallas on July 6, 2026, in a phased rollout expected to bring thousands of listed securities online by the end of the month.[7] Its backers include BlackRock, Citadel Securities, Charles Schwab and JPMorgan Chase, with roughly $275 million in committed capital behind the launch.[8]

The milestone that matters most is still ahead. Corporate listings are expected to begin in the fourth quarter of 2026, and TXSE plans a single-tier structure with listing standards pitched at mid- and large-cap issuers. An exchange that merely trades securities listed elsewhere is a curiosity. One that begins winning corporate listings opens a second front in the competition with the NYSE and Nasdaq, and gives companies weighing an IPO or a dual listing a genuinely new variable to consider.

 

The Broader Contest

None of this is happening in a vacuum. A steady procession of prominent public companies has reincorporated out of Delaware in recent years, a trend that has been coined “DExit,” citing everything from frustration with particular Chancery rulings to a desire for statutory predictability. Federal regulators have noticed. Speaking at Texas A&M School of Law’s Corporate Law Symposium in February, SEC Chairman Paul Atkins observed that “Texas has begun to build something that could offer an interesting alternative to Delaware,” and framed interstate competition for corporate charters as a healthy feature of American capital markets.[9]

Delaware’s position is not in near-term jeopardy. It retains more than a century’s head start in case law, judicial expertise and market familiarity, and Texas will need years of written opinions before its courts offer comparable predictability, to say nothing of the time required for a new exchange to win listings away from two entrenched incumbents. But that direction is becoming clearer, as the infrastructure is no longer theoretical. The court is deciding cases, the statutes are being enforced and the exchange is trading.

 

What This Means for Businesses — Including Those Far From Texas

A company does not need a headquarters in Dallas to feel these changes. For businesses negotiating significant contracts with Texas counterparties, forum-selection clauses deserve fresh attention: the $5 million threshold and the Business Court’s removal mechanism mean a dispute can land in the new forum whether or not the parties planned for it. For boards and investors evaluating where to incorporate, or facing pressure from shareholders or acquirers to consider it, the comparison between S.B. 29’s codified protections and Delaware’s judge-made doctrine is now a genuine legal analysis rather than a thought experiment, with real trade-offs running in both directions: Texas offers statutory clarity and management-friendly procedure, while Delaware still offers unmatched depth of precedent. And for issuers thinking ahead to the capital markets, TXSE’s listing standards and the incentives Texas has extended to companies that list on a Texas exchange, add a new dimension to going-public and dual-listing decisions.

 

Pastore LLC advises businesses, financial institutions, and executives on corporate governance, securities matters, and complex commercial litigation, and has attorneys who have been admitted to the Delaware courts for certain sophisticated matters and the Texas Bar.

[1] Tex. H.B. 19, 88th Leg., R.S. (2023) (codified at Tex. Gov’t Code Ch. 25A), https://capitol.texas.gov/BillLookup/Text.aspx?LegSess=88R&Bill=HB19.

[2] The Business Court, Tex. Jud. Branch, https://www.txcourts.gov/businesscourt/ (last accessed July 9, 2026).

[3] Tex. H.B. 40, 89th Leg., R.S. (2025) (amending Tex. Gov’t Code Ch. 25A).

[4] Tex. S.B. 29, 89th Leg., R.S. (2025) (amending the Tex. Bus. Orgs. Code).

[5] Gusinsky v Reynolds, 3:25-CV-1816-K, 2026 WL 747179, at *4-6 (N.D. Tex. Mar. 17, 2026).

[6] Tex. H.J.R. 4, 89th Leg., R.S. (2025) (approved by Texas voters Nov. 4, 2025); see also Texas Stock Exchange Begins Trading as Dallas Challenges Wall Street, Texas Policy Research (July 6, 2026), https://www.texaspolicyresearch.com/texas-stock-exchange-begins-trading-as-dallas-challenges-wall-street/.

[7] In the Matter of the Application of Texas Stock Exchange LLC for Registration as a National Securities Exchange, Exchange Act Release No. 34-104146 (Sept. 30, 2025), https://www.sec.gov/files/rules/other/2025/34-104146.pdf; TXSE Production Launch and Market Activation, Texas Stock Exchange, https://www.txse.com/alerts/txse-2026-002 (last accessed July 9, 2026).

[8] Paul Cobler, Texas Stock Exchange to launch trading Monday, The Texas Tribune (July 3, 2026), https://www.texastribune.org/2026/07/03/texas-stock-exchange-launch-trading/.

[9] Paul S. Atkins, Remarks on Revitalizing U.S. Capital Markets and State Competition in Corporate Law, Texas A&M School of Law Corporate Law Symposium (Feb. 17, 2026), republished at Harvard Law School Forum on Corporate Governance, https://corpgov.law.harvard.edu/2026/02/18/remarks-by-chair-atkins-on-revitalizing-u-s-capital-markets-and-state-competition-in-corporate-law/.

Tyler W. Rutherford Admitted to the State Bar of Texas

Posted on by Kelly McElroy

Pastore LLC is pleased to announce that Tyler W. Rutherford has been admitted to practice law in the State of Texas. This admission expands Mr. Rutherford’s multi-jurisdictional practice, which already includes Connecticut, New York, the U.S. District Court for the Southern District of New York, the U.S. District Court for the District of Connecticut, and the U.S. Court of Appeals for the Second Circuit.

Mr. Rutherford’s practice focuses on securities and corporate litigation, breach of fiduciary duty claims, business torts, and transactional matters. His expanded admission reflects Pastore LLC’s continued growth and its capacity to serve clients across an increasingly broad geographic footprint.

Pastore LLC Welcomes It’s Summer Class

Posted on by Kelly McElroy

Pastore LLC welcomes its 2026 Summer Class. The firm welcomes three Summer Associates and two Summer Law Interns. The Pastore Summer Associates are: Cyddni Smith, who has a degree from New York University in Economics, and is a second year at Pace University Elizabeth Haub School of Law. Darin Carlin, who has a degree from Fordham University in Economics, and is a first year at Pace University Elizabeth Haub School of Law. DeJa Sutherland who has a degree from St. John’s University in History, and is a first year at Pace University Elizabeth Haub School of Law. Pastore also welcomes Summer Interns Victoria Stockdale, a rising junior at the University of Richmond majoring in Business Administration and minor in Law and Liberal Arts, and Ava Kuehn, a rising junior at Bucknell University majoring in Political Science and Philosophy.

Pastore Attorney Tyler W. Rutherford’s Awarded the Rising Star Award

Posted on by Kelly McElroy

Tyler W. Rutherford was recently awarded the Rising Star Award for the Private Sector at the 2026 Pace Haub Law Advocacy Program Gavel Gala. Mr. Rutherford is a proud graduate of Pace Law School and routinely gives back to the law school’s Advocacy Program. Mr. Rutherford regularly handles complex matters involving securities disputes, fiduciary duties and corporate disputes in federal and state courts.

Pastore LLC Represents Senior Vice President in Dispute With World’s Largest Asset Manager

Posted on by Kelly McElroy

Pastore LLC recently represented a Senior Vice President of the world’s largest asset manager in an employment dispute involving senior managers involved with investor relations. Our attorneys worked closely with the client to navigate complex workplace dynamics, securities industry issues and engage in strategic negotiations with the employer. The matter involved the gathering of some of the world’s largest private equity investors. Through these efforts, we successfully secured a favorable settlement and negotiated an amicable separation that protected our client’s professional reputation and future career opportunities.

Pastore LLC Ranked in Chambers USA New York Spotlight Guide 2026

Posted on by Kelly McElroy

Pastore LLC has been ranked in Chambers USA New York Spotlight Guide 2026 and recognized as a leading small to medium-sized law firm offering a credible alternative to Big Law.

Pastore LLC was selected based on an independent and in-depth market analysis, coupled with an assessment of the firm’s experience, expertise and caliber of talent.

Chambers Spotlight New York 2026 highlights 262 ranked firms across seven regions and 31 distinct practice areas.

Now featuring 67 ranking tables, this expanded edition showcases Metro New York’s unmatched concentration of legal talent, and captures the full spectrum of work handled by the country’s leading small and mid-sized firms – from high-stakes commercial litigation, white-collar defence and securities disputes to complex corporate/commercial, real estate and employment matters.

Pastore LLC stood out for its exceptional work and is recognized in Litigation: Securities.

Joseph M. Pastore III expressed the firm’s gratitude: “Pastore LLC is honored to be recognized by Chambers and Partners in their Spotlight Ranking for Metro New York. This acknowledgment reflects our commitment to providing top-tier legal services tailored to the unique needs of our clients and the complex matters that we help them navigate.”

This recognition underscores Pastore LLC’s position as a key player in Connecticut and New York’s legal landscape, offering clients access to high-quality legal representation that combines Big Law expertise with local specialized support.

Background to Firm

In 2012, former Big Law attorneys came together to establish Pastore LLC. After decades of experiences at Big Law, the founders already had built successful careers. Yet, they hoped to achieve something more. At larger law firms, the founders watched clients struggle with bureaucracy and lack of personal commitment. Pastore was founded to provide clients an opportunity to work closely with experienced attorneys in sophisticated and important matters. With Pastore, clients enjoy best of both worlds: capability of a big law firm and personal approach of a small law firm.

For fourteen years, Pastore LLC has built credibility through hard work and a client-focused approach. Pastore has a global reach; the firm has a strong reputation in Metro New York, but it also draws clients from across the country and internationally. The firm’s approach to growth is simple: Pastore’s attorneys take exceptional care of the legal issues clients face.

Although Pastore is ranked in Chambers New York 2026 for securities litigation, the firm provides excellent legal services in various fields. Pastore’s attorneys have experience at top national firms such as Paul, Weiss, Rifkind, Wharton & Garrison LLP, Kelley Drye & Warren LLP, Brown Raysman Millstein Felder & Steiner LLP, Skadden, Arps, Slate, Meagher & Flom LLP, Proskauer Rose LLP, and regulatory agencies such as the Securities and Exchange Commission and the New York Stock Exchange. Pastore counts as its alumni attorneys at top 10 firms and the Lieutenant Governor of the State of Connecticut. The firm handles commercial and securities litigation, corporate, employment, intellectual property, real estate and construction litigation, and many other areas. Regardless of whether the matter is transactional, advisory, or litigation, experienced attorneys are always ready to take on the matter.

Background to Chambers and Partners

Chambers and Partners has over 30 years of US research in the Legal Market and therefore uniquely placed to identify markets where there is a significant collection of leading smaller firms, Chambers is on a mission to uncover the best legal talent wherever it may be.

Chambers is on a mission to uncover and champion the best legal talent across the United States, wherever it exists, starting with shining a spotlight on select states in 2024.

Chambers sought to identify the leading small to medium-sized law firms offering a credible alternative to Big Law. The ranked firms were selected based on independent and in-depth market analysis, coupled with an assessment of their experience, expertise and calibre of talent.

Chambers Spotlight covers Pennsylvania, Massachusetts, California, Illinois, Ohio, Texas, Georgia, Florida, North Carolina and New York State.

 

Pastore Attorney Tyler W. Rutherford’s Article Published in the Westchester Lawyer

Posted on by Kelly McElroy

Tyler W. Rutherford was recently published in the Westchester Lawyer, the journal of the Westchester County Bar Association. His article examines how Texas’s evolving financial and judicial infrastructure, including the TXSE, the Texas Business Court, and the NYSE’s expansion into Dallas, is reshaping the corporate law landscape traditionally dominated by Delaware. The article can be accessed here.

As a firm that applies a long history of practice in traditional finance and securities to the realm of corporate formation and financial platforms, Pastore LLC can advise clients on best practices concerning the state of domicile or corporate structure for their business.

Connecticut Appellate Court Rules in Favor of Pastore LLC’s Hedge Fund Clients in Landmark Jury Trial Decision

Posted on by Kelly McElroy

In a complex dispute involving multimillion-dollar private equity investments and hedge fund ownership, the Connecticut Appellate Court ruled in favor of Pastore LLC clients over investors represented by Wiggin and Dana. The trial court consolidated two related actions and removed both cases from the jury docket just weeks before trial. Despite repeated filings including jury trial claims, the trial court held that those claims were untimely under Connecticut General Statutes § 52-215, concluded that the parties had not provided valid written consent, and proceeded instead with a bench trial that resulted in judgments against the appellants.

On appeal, the Connecticut Appellate Court reversed, holding that the parties’ filings, including jury claims and certificates of closed pleadings, constituted binding written consent under § 52-215. The Court emphasized that once such consent is given, it cannot be unilaterally withdrawn, and timeliness is not a barrier where written consent exists. The decision reaffirms the strength of Connecticut’s jury trial statute, clarifies that written consent may be established through procedural filings, and ensures that litigants’ constitutional right to a jury trial is preserved.

Pastore LLC’s appellate team, including Joseph M. Pastore III, Melissa Rose McClammy, Paul Fenaroli and Tyler Rutherford, successfully argued that the trial court’s approach undermined both statute and precedent, persuading the Appellate Court to restore the cases to the jury docket. This ruling not only protects the rights of the firm’s clients but also establishes an important precedent for future Connecticut litigants by confirming that properly documented filings satisfy the written consent standard. The decision underscores the firm’s commitment to safeguarding procedural rights and achieving impactful results in high-stakes commercial litigation and financial services.

Pastore LLC Obtains a $51M PJR Involving the Largest Real Estate Development in Westchester and a Greenwich Based Real Estate Developer

Posted on by Kelly McElroy

Pastore LLC on behalf of its client, a 49% shareholder in a development and construction management firm (the “Company”), together with Pullman & Comley, LLC, counsel for the Chapter 7 Trustee for the Company in the SDNY, obtained a Prejudgment Remedy authorizing the attachment of $51,215,793.42, which includes $1,500,000 in punitive damages. The claims involve corporate governance and ownership structure of construction projects totaling over $1,600,000,000. In its decision granting the Prejudgment Remedy, the Court noted that “[t]he evidence of defendants’ violation of their fiduciary duties and violation of CUTPA was substantial and stunning.”

Pastore LLC Wins Unanimous Jury Verdict for Private Equity Investor

Posted on by Kelly McElroy

Pastore LLC represented a private equity investor and an active philanthropist in Greenwich based non-profits in a defamation case against a former candidate for the United States Senate and House of Representatives. After three weeks of jury selection and evidence, a jury in the Stamford Superior Court deliberated as to whether the defendant was liable for defamation, defamation per se, false light and intentional infliction of emotional distress. Within hours, the jury reached a verdict in favor of the plaintiff, Pastore LLC’s client, on all counts and all questions tendered to the jury. The jury awarded substantial monetary damages and punitive damages finding the defendant’s conduct to be wanton, willful and malicious. Pastore LLC’s Joseph M. Pastore III, Melissa Rose McClammy and Tyler W. Rutherford represented the private equity investor in the case.