Crackdown on Corporate Insiders Collides With New Era of Control

Iconic founders engineering new forms of corporate control are complicating a crackdown on self-dealing by the leading US business court.

First-of-their-kind decisions this year involving Tesla Inc., TripAdvisor Inc., Moelis & Co., and Sears Hometown and Outlet Stores Inc. sought to tighten the standards for conduct by controlling stockholders. Those cases resolved pressing issues surrounding CEO pay, reincorporation in another state, and governance agreements with preferred backers.

But the seven judges on Delaware’s Chancery Court are struggling to apply age-worn legal doctrines to a landscape in which many of the most important companies are run by “idiosyncratic ...