Why Delaware LLCs?
For years, scholars have debated why parties choose to incorporate under Delaware law companies that operate businesses in other states — since different answers to this question lead to different normative assessments of the practice. Traditionally, this debate focused on public corporations and ignored private firms and non-corporate forms of business. The exploding use of limited liability companies (LLCs) instead of corporations, and the formation of LLCs under Delaware law to operate businesses outside Delaware, call for expanding this discourse to ask “Why Delaware LLCs?”. This article adds to the recent literature seeking to answer this question empirically. It critiques recent studies that looked for statistically significant correlations between state of formation choices for LLCs and differences in state LLC statutes and legal infrastructure. Finding this methodology suffers from inherent limitations, this article presents results from a different approach. I interviewed business attorneys whose clients have formed LLCs and asked them a battery of questions designed to ascertain why their clients formed LLCs in Delaware. The results of this survey provide important insights into the aspects of Delaware’s substantive LLC law and its legal infrastructure that motivate formation of Delaware LLCs, and thereby serve as an important complement to the existing statistical studies.
Corporations and the Market for Law
The state competition for corporate law has long been studied as a distinct phenomenon. Under the traditional view, corporations are subject to a unique choice-of-law rule, the internal affairs doctrine (IAD). This rule is explained as a historical accident, or by the special logistics of the corporate contract. The resulting market for corporate law appears to have special characteristics, particularly including the dominance by the single state of Delaware. This paper challenges the traditional view. It shows that the corporate law market is best understood as a special application of the general market for law. Any differences are matters of degree rather than kind, and are explained by considerations underlying enforcement of all choice-of-law contracts rather than by factors unique to corporations. It follows that theories of corporate competition that ignore the broader law market context are incomplete, and that the competition for corporate law carries lessons for the law market generally. Moreover, the connection between the corporate and other law markets has implications for the nature of corporate law, the constitutional status of the IAD, the scope of the IAD, and for the relationship between state and federal law.
Prevention of Barite Sag in Oil-Based Drilling Fluids Using a Mixture of Barite and Ilmenite as Weighting Material
Drilling high-pressure high-temperature (HPHT) wells requires a special fluid formulation that is capable of controlling the high pressure and is stable under the high downhole temperature. Barite-weighted fluids are common for such purpose because of the good properties of barite, its low cost, and its availability. However, solids settlement is a major problem encountered with this type of fluids, especially at elevated downhole temperatures. This phenomenon is known as barite sag, and it is encountered in vertical and directional wells under static or dynamic conditions leading to serious well control issues. This study aims to evaluate the use of barite-ilmenite mixture as a weighting agent to prevent solids sag in oil-based muds at elevated temperatures. Sag test was conducted under static conditions (vertical and inclined) at 350 °F and under dynamic conditions at 120 °F to determine the optimum ilmenite concentration. Afterward, a complete evaluation of the drilling fluid was performed by monitoring density, electrical stability, rheological and viscoelastic properties, and filtration performance to study the impact of adding ilmenite on drilling fluid performance. The results of this study showed that adding ilmenite reduces sag tendency, and only 40 wt.% ilmenite (from the total weighting material) was adequate to eliminate barite sag under both static and dynamic conditions with a sag factor of around 0.51. Adding ilmenite enhanced the rheological and viscoelastic properties and the suspension of solid particles in the drilling fluid, which confirmed sag test results. Adding ilmenite slightly increased the density of the drilling fluid, with a slight decrease in the electrical stability within the acceptable range of field applications. Moreover, a minor improvement in the filtration performance of the drilling fluid and filter cake sealing properties was observed with the combined weighting agent. The findings of this study provide a practical solution to the barite sag issue in oil-based fluids using a combination of barite and ilmenite powder as a weighting agent to drill HPHT oil and gas wells safely and efficiently with such type of fluids.