TheCorporateCounsel.net

If you’re following the DExit debate, you may be interested in this recent blog by Prof. Ben Edwards, which tracks the status of all 2025 public company Nevada reincorporation proposals. According to the blog, 12 of 14 proposals to move from Delaware to Nevada have passed, and the failure of the other two to pass was due to a large number of broker non-votes. Prof. Edwards notes that one vote in particular may be worth keeping in mind when it comes to the formula for success of future proposals:

One thing worth highlighting here is that Fidelity National succeeded on its second attempt to shift to Nevada. Previously in 2024, it secured 1110,277,692 votes in favor with 107,467,828 votes against. With about 27,000,000 broker non-votes, this wasn’t enough for the necessary majority. This year the votes were different with 147,059,505 votes cast in favor of the move and 74,874,567 votes cast against the move.

So what changed? As I covered in an earlier post, Fidelity National’s Nevada charter increased shareholder protections above the Nevada default threshold. This may have shifted some votes and makes it something to watch for future efforts.

The blog says that two proposals to move from Delaware to Nevada are currently pending, along with one proposal to move from New York to Nevada. Moves by public companies from Delaware to Nevada or other states are getting a lot of media attention, but let’s face it, 14 public company migrations during the current year with the possibility of two more isn’t exactly a reincorporation tidal wave.

My guess is that we’ll need to see whether, over time, IPO candidates are incorporating in places other than Delaware in order to assess just how big a long-term threat Delaware is facing. That’s because the data suggests that most Delaware public companies are unlikely to migrate, and some have argued that the bigger threat may be from private equity and venture capital investors who are persuaded that other jurisdictions will offer them a greater opportunity to keep calling the shots post-IPO than will the Delaware Chancery Court. 

– John Jenkins