Investors & Reincorporations with Ann Lipton and Michael Levin

In this episode, CII’s General Counsel Jeff Mahoney sits down with the co-hosts of the Shareholder Primacy podcast, Ann Lipton and Michael Levin, to get their views on reincorporations. Ann and Michael illustrate what they believe should be the key considerations for a long-term shareholder when voting on whether to approve a reincorporation of a hypothetical Delaware public company to (1) Nevada, (2) Texas, and/or (3) the Cayman Islands. Ann and Michael also rank the order their preferred reincorporation destinations and explain their rationales.

Transcript

SPEAKER_04 0:11

Welcome everyone. Thank you for listening to the Council of Institutional Investors Voice of Corporate Governance, the number one corporate governance podcast in the U.S. as determined by million podcasts. I'm your host, Jeff Mahoney, General Counsel of CII. Our topic for this episode is investors and re-incorporations. And my special guests today are the co-hosts of my favorite podcast, Shareholder Primacy, available on all major podcast platforms. We welcome Ann M. Lipton, professor of law, and Lawrence W. Demouth, Chair of Business Law at the University of Colorado Law School, and Michael R. Levman, a respected investor, corporate executive, and management consultant with almost 30 years experience in investing, corporate finance strategy, and risk management. Michael previously served on the boards of Comarco and ATE, and is currently the chair of the board of directors of Charles and Colverd LTD. Thank you, Anna Michael, for taking the time to share your knowledge and expertise with us today on an issue of great interest to many investors.

SPEAKER_02 1:18

Thank you so much for having us.

SPEAKER_00 1:19

Yeah, I'm uh I'm delighted to uh to uh do this. I've been a listener for a long time and was excited when you suggested that we uh join you to talk about this today.

SPEAKER_04 1:29

As of June 16th, 2026, data regarding reincorporation announcements compiled by Benjamin P. Edwards, who's Associate Dean for Faculty Development Research and Professor of Law at the UNLB William S. Boyd School of Law, that data reveals that since January 1st, 2026, 27 companies have announced their reincorporation from Delaware to other jurisdictions. And the top three destinations for those 27 Delaware companies were Nevada, Texas, and the Cayman Islands. And of those 26 reincorporations, only one today, Texas Capital Bank Shares, which is a bank holding company listed on Nasdaq and headquartered in Dallas, they are the only company so far that has failed to receive the approval of a majority of the shareholder votes cast. So on today's episode, we're going to discuss what are some of the key considerations for a long-term shareholder when voting on whether to approve a reincorporation.

SPEAKER_00 2:35

Well, that's it's something I've kind of wondered about. So I'm glad you you wanted to talk about this. Is companies have their reasons and so forth for wanting to reincorporate, wanting to leave Delaware, which domicile I pick. But uh the angle of how long-term investors should be thinking about reincorporation is one that I don't think has gotten very much attention in all the discourse that we've seen. And there's a lot of discourse, you know. Uh, you know, Ben Edwards has has really done a lot to raise awareness of what's going on with his his tracker, if you will, about reincorporation. There's you know, there's just so much in the news. Ann and I talk about it on our podcast, but the investor angle on this and how to think about it and how to vote on this, I think is a very important and appropriate uh question for us to uh to talk about here.

SPEAKER_02 3:31

Yeah, um I guess I think that, you know, in general, just sort of big picture, the issue here and the differences are generally about the ability of shareholders to hold management accountable for management failures. But at the same time, the problem is not all shareholders agree with each other as to what counts as a failure. And there's always the risk of one shareholder who's gonna be able to hijack everyone else. So litigation, on the one hand, you may want to preserve a right to sue over problematic behavior. But on the other hand, if one shareholder can sue, then kind of all the shareholders can sue. And there's a risk that there'll be some shareholders who are suing over something that other shareholders disagree with, frivolous litigation, things like that. And that ends up costing the company time, it costs the company expense. Voting, obviously, great way to hold management accountable. But if it's a startup tech company with like a long-term vision, maybe you don't want a short-term misshareholder coming in and ousting management. So maybe you'd prefer to see more management voting power. So, like, on the one hand, we have this issue of you want to protect the enterprise from interventions you don't want, but at the same time, you want to preserve a space for the shareholder interventions you do want. And it's really hard to know in advance like where exactly to strike that balance.

SPEAKER_00 4:46

And and as you observe very well, shareholders are diverse, and some of them view some of these issues as more important than others do. So, you know, finding a place where you get you get to kind of the right level of attention to shareholder concerns is is not easy.

SPEAKER_04 5:05

So let's dive into it. I'm gonna present three hypothetical reincorporations for your consideration. In each of the hypotheticals, you represent long-term shareholders of a Delaware public company, and you're being asked by the company to vote to approve their proposed reincorporation. So, hypothetical number one, the Delaware public company is reincorporating into Nevada. Nevada. Okay, Nevada. So, Ann, look let's start with you. What what are what are your key considerations for determining whether you would vote in favor of a Delaware public company reincorporating to the great state of Nevada? Okay, um, well, let's talk about some of the biggest differences.

SPEAKER_02 5:44

Um, first, Delaware has a very well-developed court system for dealing with corporate disputes. Nevada doesn't. It's in the process of trying to create one, but it doesn't have one yet. So that means if disputes arise, Delaware courts will be able to hand them quick, handle them very quickly. And according to established case law, it's not clear Nevada can at this time. They got a lot of unpublished decisions. It's just, you know, they're not there yet. And that may matter for traditional shareholder litigation over breaches of fiduciary duty, mismanagement, but it may also matter for activist engagements, which Mike will talk about if things end up in litigation. Maybe even it matters for contract litigation or merger litigation. Beyond that, one difference concerns the general ability to bring traditional public shareholder lawsuits over breaches of fiduciary duty. Usually these breaches involve conflicts of interest and self-dealing. So, how does Delaware compare to Nevada? Well, um, without going through all the detail, I'll just say Nevada makes it very hard for shareholders to sue over conflicts. The shareholder would have to show more than the existence of a conflict. They would have to show intentional misconduct, fraud, or knowing violation of law. In Delaware, by contrast, when they're self-dealing, Delaware requires management to adopt various cleansing procedures to essentially let independent board members or the disinterested shareholders approve the transactions. And if they don't, then shareholders can sue. But those cleansing procedures are really fairly undemanding. Um, I'm not convinced that Delaware imposes that much more liability than Nevada does under its cleansing procedures, the ones that it actually just recently adopted. So let's just say Delaware is slightly more protective of shareholders when it comes to self-dealing. But the law just changed on this and it's too early to tell how meaningful a difference that is. And the final thing I'll just mention really quickly is shareholders' right to inspect corporate records. In Nevada, that's impossible for public companies. In Delaware, shareholders can get internal information, but they're usually limited to formal board materials like meeting minutes, which are of course heavily lawyered. If shareholders want less formal materials, emails, texts, those kinds of documents. Um, Delaware, again, very recent change to make it much harder for shareholders to get those documents. It's not clear how much harder because there haven't been really cases on this. So Delaware shareholders do have greater rights to access to internal information than Nevada shareholders have. Nevada, sorry. I know it's supposed to be Nevada. But right now it's hard to say how far those rights go. So if it's really important to you to preserve those litigation rights, in Delaware, they seem to be stronger, but it's not clear how much stronger. And plenty of people would argue that frivolous litigation is a real drain on corporate resources. But one other thing, and then I will stop. We can't forget for all of these conversations that a company could reincorporate to Nevada or Texas or whatever and put in their charter more protections than the state would otherwise have. So if what you're really concerned about is like some kind of tailoring mix between the jurisdictions, that actually can be done and might also be a consideration. Michael, you're up. Delaware's Nevada. Let's see.

SPEAKER_00 8:38

Let me let me just recap a couple things because Ann highlighted a couple of the really important two investor attributes of this. The first, of course, is just procedural. The procedure for bringing litigation in Nevada is uh going to be trickier. Delaware just has a much more a much better established court system and so forth. So you'll get stuff handled somewhat better, I suppose, at this moment uh than in Nevada. And it'll probably happen somewhat faster, uh, which of course is is uh relevant here. And then the second, I want to focus on the the books and records attribute of this, which is really important to at least the kind of investors that I spend a lot of time with. Um, you know, the idea of being able to do books and records demand both for just general uh information about what's going on in investment, then also in anticipation of litigation. That's that's pretty critical. And the idea that that Delaware has a very well established uh set of rules for how that can work is is makes you know it sometimes infuriates me when you know there's some demand I want to make and I it doesn't go well. But the idea that Nevada, as we know, doesn't really allow it nearly really at all, um, is is somewhat troubling. Now, I'll I'll make one other kind of comment is that most, you know, under under our little hypothetical here, we're talking about you know, a long-term shareholder that's probably not an you know an activist, the kind of thing that I do. And I don't do a whole lot of litigation in any case, and I'm expecting that in the hypothetical, most long-term shareholders are not going to be a party to a lawsuit. So this has to do more with what kind of environment there is for holding management accountable rather than whether it's going to sort of directly affect uh you know that that voting shareholder. All right. So so that kind of puts it like a maybe a half a step removed from the direct interest of that voting shareholder. So you'd have to be wondering, okay, what kind of environment do we want to have for holding management accountable uh rather than how it's directly going to affect that shareholder? So that those are the kind of things that, you know, from a mostly legal standpoint, I would be thinking about. But then you also have to uh mix into this the idea that, you know, my own opinion, I'm pretty stubborn about this stuff. And again, much as I borech about you know Delaware and you know, I get, you know, I've been in Delaware, you know, I pursued a chancery matter at one point on my own. And it can be very frustrating. But anything that a company wants to do that's going to really, and I'm not even going to say materially diminish, just diminish, you know, shareholder rights to, you know, in this case, demand books and records or make it procedurally more difficult to bring litigation for others to bring litigation that I know would benefit me as a long-term shareholder, uh, that bothers me. So I would be, you know, looking not necessarily at some of the you know legal points, technical points about, you know, does, you know, how does a Delaware business, you know, Chancery Court work relative to the uh Nevada, the new emerging Nevada business. I think it's called a business court. I can't remember what they call it there. Yeah, I think so. Um, but I'd say, you know, why does the company want to do this? And you know, for most long-term shareholders, nuisance lawsuits are, you know, just that they're a nuisance and so forth. They take a little bit of corporate resources. But in my kind of view, as I think about this, it's not worth giving up a lot of the rights that are well established under Delaware jurisprudence just to kind of deal with some of those nuisance lawsuits. Those nuisance lawsuits, yeah, do cost some money, but not nearly worth it to make those go away when we give up a lot of other rights to you know go after fraud or to be able to investigate the value of our uh shares and so forth. So so I I would take that somewhat broader view is why would the company want to do this and you know, really look critically uh at that.

SPEAKER_02 12:50

So I'll I'll just throw one thing out there though for why the company would want to that has nothing to do with anything we've said so far, which is that Delaware is expensive as a jurisdiction because that's where they make their money. So there are fees. Now, for a big company, that is immaterial. It's a rounding error. For a tiny company, the difference in fees could be very significant. But on the other hand, the tiny companies are the ones where you would have the most concern about, you know, misconduct and being able to hold management accountable. So there are actually like completely not insulators from shareholder reasons that you would go.

SPEAKER_00 13:22

Like painless money is a real thing for some companies, but the trade-off for shareholder protections for most of the portfolio companies that would be voting on this, the cost of Delaware, I agree with you that Delaware is quite expensive. It's quite expensive to pursue litigation there, to defend litigation there, the whole Delaware bar, which I have friends in and respect and really like, is this very costly to all booth to getting uh uh justice. But you know, whether it's kind of worth it, uh it might be. You can't you kind of get the uh you get the legal environment that you pay for, and and and it might be might be worth it in Delaware. Let's go to hypothetical number two.

SPEAKER_04 13:59

So the same Delaware public company from hypothetical number one. This time, they're gonna reincorporate in Texas, the great state of Texas, rather than the great state of Nevada. So, Michael, let me start with you. What what are some of your key considerations when you're thinking about Delaware to Texas?

SPEAKER_00 14:15

No, I am not supporting any company that wants to reincorporate in Texas based on what we've learned about how Texas, what Texas is trying to do here. You know, clearly there's you know an economic angle on it, like a state economic angle. You know, Nevada's trying to develop itself as a as a domicile, so is Texas and so forth. Texas is, I'm gonna say, almost embarrassingly pandering to uh company boards and so forth, you know, saying, you know, we're gonna make it impossible. You know, Nevada at least is kind of you know waving their hands at you know, making it preserving some shareholder rights. Texas is essentially making it impossible for a shareholder to exercise any kind of rights. They're creating a, and I talked about the environment earlier. I mean, they're creating an environment where shareholders are essentially powerless, essentially, not technically, but essentially powerless to really hold management, hold leadership accountable. You know, we've we've seen that in you know several examples. You know, the one that Ann and I always return to, sadly, is uh the Musk family of companies. Well, you know, they're not, you know, they're in Texas economically because of the labor force there and so forth, but they're they're moving their domicile there in all these companies because it it allows uh the CEO Musk to exert control in ways that that other states you know wouldn't be quite so tolerant of. So the the again, the short answer is, and I'll I'll let Ann comment on some of the more technical nuance here, legal nuance, but any company that wants to move to Texas, um I if I was a shareholder, I'd be voting no and I'd probably be selling my shares.

SPEAKER_04 15:53

Ann, anything good you can say about going from Delaware to Texas from a long term customer.

SPEAKER_02 15:58

Yeah, I am. So, first of all, um Texas is at least as protective of managers as Nevada is. Um, shareholders do have slightly more rights to internal information, but they also have less ability to sue over conflicts in at least some cases, because Texas, I mean, Nevada and Texas, you have to show like this knowing misconduct kind of thing. But Texas also allows companies to put that thing in their bylaws that says the shareholder has to have 3% of the company in order to sue. And in big companies, anyway, that's simply not going to happen, which means no matter how much fraud there is, you literally just can't sue. So here's where I actually, but I think at the end of the day, both of them are very protective of managers and make it very hard to bring litigation either way. But here's where I actually see the big difference. Texas is taking what I call an anti-woke approach to corporate governance. So it allows companies to limit uh shareholder proposals. And we know shareholder proposals they can be anything, but they usually are associated with corporate social responsibility, ESG stuff. Um, Texas passed a law making it very difficult for proxy advisors to recommend in favor of anything involving ESG or even recommending against management.

SPEAKER_00 17:03

Right. Yeah. Even it says even a say on pay and so for you to. Yeah, right.

SPEAKER_02 17:07

Because ESG, so the G. Now that law is on hold because it may violate the First Amendment, but the Texas legislature is trying. Um, in the past, one legislator tried to make it easier for shareholders to sue if the board based a decision on ESG factors, that kind of thing. So the whole approach to corporate governance tends to treat shareholder rights as somehow equivalent to liberal politics, to partisan liberal politics. Um, so if we're thinking solely from a financial perspective and nothing else, there are some companies that might benefit from that. Companies can cater to a market by branding themselves as conservative. This is just sort of a branding thing, and you can make money that way. Maybe they can get political or regulatory protection by allying themselves with the Texas legislature. There are real financial benefits there. But it also means the companies that want to engage in liberal politics, and again, for financial reasons. Maybe they have liberal customers, they think green marketing works, they have they have employees who have liberal bent, whatever it is, those companies might find themselves a target in Texas, a target of the legislature. So my big example of this is Disney. Disney incorporated in Delaware. It got into a big fight with Ron DeSantis because the board criticized the Don't Say Gay Law, right? Um, they criticized the Don't Say Gay Law, and they did that for financial reasons. Employees were doing walkouts. There was labor unrest. They, but they so to respond to their employees from a financial perspective, Disney gave some mild criticism of the Don't Say Gay Law, but it caused them a ton of financial problems in Florida where they were doing business. They're organized in Delaware, of course. But in Texas, that's the same problem. You could imagine, so like in Delaware, what ultimately happened was that a shareholder of Disney sued Disney and said, you made this liberal political decision and it cost you. And I want access to internal records on that. And the Delaware court said, no, this was a financial decision. Okay. Are we sure that would happen in Texas? Because you can imagine in Texas political shareholder lawsuits accusing a corporate board of violating its fiduciary duties because they took a stance on a liberal political issue. You can imagine them getting a sympathetic hearing in Texas. If Texas gets even a part of its proxy advisor law passed the legal challenges, then shareholders of Texas companies won't get complete counsel from their proxy advisors. So that's the trade-off for shareholders when they're thinking about this. Will this conservative bent that Texas is taking, and that includes, if the Texas legislature has its druthers, limits on the even the advice that can be offered on shareholder voting? Is that going to contribute to profitability or not?

SPEAKER_00 19:42

Right. I think you're kind of supporting the idea that there's an environment that Texas is trying to encourage or create that is a little more, a little more, I'm not going to say biased, but but you know, goes in a certain direction that we would not necessarily find in Nevada. Nevada is trying to like be a little more, like kind of be like Delaware, but a little more just helpful to management. But if you're in Texas, it's there's other reasons why.

SPEAKER_02 20:10

Yeah, I exactly. I think that a lot I actually do think that some companies have reincorporated Texas and chosen Texas. Some of the ones that chose it are like they're Texas companies. They're already headquartered there. Yeah, like the operations are there.

SPEAKER_00 20:21

And we're not talking about Delaware there, but Exxon, you know, moved from New Jersey, but Exxon's essentially a Texas business.

SPEAKER_02 20:29

And a lot of yeah, a lot of the companies that have sought to reincorporate in Texas are literally Texas companies. But some others, I think, are doing it essentially as a part of a political branding. And there are companies that I can see that being a financial benefit to one way or another.

SPEAKER_00 20:43

I'm not sure that's but it's very hard to use a customer base or there's a customer base that that appeals to.

SPEAKER_02 20:48

Yeah. But I can't see that it being a draw in like the general sense, the way Deborah.

SPEAKER_00 20:54

And then taking this back to how to vote on this, okay. If for whatever reason you have a company in your portfolio because it's got the right risk-return mix, and they in fact benefit from being in Texas and they can make the case, it's not how I would vote, but I could see how a long-term shareholder might say, All right, you made a good case, you know, you're you you you do something you do something in a way where you know your business will benefit. The business will benefit, not just management will benefit from a Texas legal domicile. Cool. Um that's gonna be a really limited number of companies. And so most of the time, like I said, because I'm stubborn, um, I'd be advocating, yeah, you probably want to vote no on this, just from a more broader shareholder rights perspective, you know, forgetting, you know, what kind of specific benefit a company gets out of this.

SPEAKER_04 21:47

So let's go to my third and final hypothetical. My Delaware public company reincorporates outside the United States to the Cayman Islands. Note we've had two examples of Delaware to Cayman Islands reincorporates. So far this year. The first was uh CDT Equity Inc., a NASDAQ listed company that's a data-driven biopharmaceutical company. The second example was Galacto Inc., a NASDAQ listed biotechnology company, which recently was renamed to Gamora Therapeutics, Inc. Both of those reincorporations were approved by their shareholders with 97% and 63% approval, respectively. So Ann, when the reincorporation from Delaware outside the United States to the Cayman Islands, how does that impact the key factors you would consider in deciding whether to vote to approve the reincorporation?

SPEAKER_02 22:43

Well, once again, um, you know, there's a lot of insulation from liability in the Cayman Islands, although possibly more rights to appraisal. They they prevent lawsuits about just about for almost everything. So there's not going to be a lot of litigation rights, there's not going to be inspection rights, and Mike may want to talk about this more. There may not even be the ability to vote for directors. That said, companies don't incorporate in the Caymans just to avoid like this kind of shareholder liability. There are other reasons to do it, like tax benefits that can be a real financial benefit to the shareholders, even with the loss of their rights. Um, it may actually change their obligations under the federal securities laws in general if they're now a foreign company, depending on other aspects of the of the of the business. So I think that, you know, Caymans versus, say, Texas or Nevada is very often going to be a like an actual operational decision. Um, so the question is, are they trying to escape like US law, or are they actually taking advantage of like real regular like US law that benefits shareholders? Are they taking taking advantage of like the real regulatory environment there that may actually be a financial boon?

SPEAKER_00 23:48

Right. I and I would I would add to that that unlike well, Texas, which you talked about, where there's businesses based in Texas that are domiciling Texas, uh there's there's there's Nevada corporations that you know that have their locus in Nevada. You know, Cayman Islands is not a hotbed of like biotech development. The reason they're they're moving to Cayman's is tax and regulatory. And it scares me. All right. The idea that there's no federal protection uh on top of the state level uh uh protection you get in Texas and Nevada, the idea that you know, there may be a tax case, sure. Um I I tend to do all my investing in you know US-based or or you know economies that are in a more Western economy kind of things. Um so I I'm I'm and I again I I'm just not that familiar until you we started thinking about talking about this today with kind of what how the Cayman Islands board even works from a governor's perspective. But there's you know lots of limits on, and again, I don't sue people that much, you know, and the idea that you know there's just no ability to do that, no ability to get books and records and so forth. I'd need to see an incredibly compelling, probably tax-based case. And even then, I'd have to wonder, okay, is that is that how I want to be investing my money in companies that are, you know, really trying to what's the difference between avoiding and evading taxes? I know one's one's illegal and one's just ethically questionable. Um but I so I I I'd have to think even harder uh than I would about Nevada or or Texas, about a company that wants to wants to wants to move to the Cayman Islands. So yeah.

SPEAKER_02 25:37

And I'll I'll just say that like just sort of my big takeaway about all of this is really there, as I said, there are different views on what the proper balance here is, given that you may not agree with all of your fellow shareholders. Um but as I've said kind of before, like I keep saying this in like various spaces, like shareholders have three rights. They can vote, they can sell, and they can sue. And that's it. And I would think, you know, from an investment perspective, you probably are more comfortable with losing one right when you know you have the others. So one thing might be something like if um a shareholder has it's a dual class company, there's a controlling shareholder, those shareholders might be more uncomfortable with incorporating in a jurisdiction with fewer litigation rights because now you've just lost two of your three rights. But if if the company has robust voting rights, single-class share, single class board, maybe they're more comfortable with losing litigation rights. Or you might think about like what is your investment strategy? Is this like an index investing situation? I know, like, even if you're in a fund, a lot of institutional investors get passed through votes on even on their index investments. That means you can't sell. So, how comfortable are you with losing other rights where you can't where selling isn't on the table? So it may very well come down to for investors, like, well, what other what other mechanisms are still available? How much am I losing at the same time?

SPEAKER_00 26:53

Yep, that's a great way to think about it, I think.

SPEAKER_04 26:56

Okay, fine, final question. I I think I know how you're gonna answer this, but I'm not sure. So let me just ask. So Michael, starting with you, can you rank order your preferred reincorporation destinations as a long-term investor when the three options are Delaware, Nevada, Delaware, Texas, Delaware Cayman Islands? Rank order from from best to worst.

SPEAKER_00 27:18

Oh, best to worst or worst to best. Can I go worst to best? Sure. Um, I think worse at this point would be Cayman. It's just so unfamiliar. And you know, the reasons to move again. I keep asking why would a company leadership want to do this? Next, and I I can't tell whether it, you know, how where in the middle it falls would be Texas. Again, because Texas companies that are moving to Texas are are doing it uh because of the environment that Texas is kind of creating. I think if the the least worst of the three would be probably Nevada. They they seem to be taking a little more seriously the idea of at least creating a a reasonable procedural environment. You know, there are certain you know, some rights that they are continuing to pursue. Again, and this is tempered by the idea that, you know, I i if anything, the thing that I do most, though other long-term shareholders who are the audiences hypothetical don't, is books and records demands. You know, the idea that Nevada, which you know, we kind of knew kind of is limited, you know, really doesn't allow that in any kind of meaningful way. That's a problem, but um, I can you know probably get around that. And most long-term shareholders are not doing books and records demands. So uh so I think Nevada would be probably, as I said, the least worst of the three.

SPEAKER_02 28:37

And you have any difference in your ranking? It really depends on what exactly you're thinking in terms of what you want. I mean, here's like two of the biggest differences between Nevada and or three are Nevada and Texas are Texas does have business courts. And there, I mean, I tend to assume that there's gonna be a thumb on the scale against shareholders because that's why they're there. But at the same time, Texas has a lot of other kinds of litigation in the state, and they want to preserve that in general. So, like there are certain rules like they're gonna be careful that they don't, you know, do anything just because they're sort of trying to make it more protective of managers, they're not gonna do anything with litigation. It's gonna mess up everything else in the state as far as litigation goes. So it has business courts and you can get some books and records if you're not doing it for litigation purposes and you're not seeking informal documents. Nevada, you can't get any books and records. So if that's really important to you and the fact that you've got a Texas business court that's going to, at the very least, sort of want to preserve the general litigation environment in Texas, then maybe Texas is better. But if you're concerned about the political environment in Texas and whether that's going to come to hurt this particular company, well, then that might be a consideration against Texas. And then finally, Texas, again, you can put that bylaw in that requires a shareholder to have 3% to bring a lawsuit even for knowing misconduct. Nevada doesn't have that. Or Nevada, sorry, it doesn't have that. So there's that sliver of preservation of litigation right that Nevada has that Texas doesn't. So it's really just about what you think is the most important to you.

unknown 30:05

Right.

SPEAKER_02 30:06

And Cayman obviously doesn't have any of it. So Cayman, the financial benefits would have to be pretty strong.

SPEAKER_04 30:12

Immense. So that concludes our podcast episode. On behalf of the Council of Institutional Investors, I want to thank my special guests, NM Lipton and Michael R. Levin, the co-host of my favorite podcast, Shareholder Primacy, available on all major podcast platforms. If you have any questions or comments regarding this podcast, please feel free to contact me at Jeff. That's J-E-F-F at CII.org. Until next time, I'm Jeff Mahoney. Thanks again for listening to the voice of corporate governance.

SPEAKER_03 30:52

Thank you for listening to this episode of The Voice of Corporate Governance, brought to you by the Council of Institutional Investors. The Voice of Corporate Governance is a free, non-sponsored podcast that highlights critical developments in corporate governance and other important issues affecting institutional investors. The views expressed by those interviewed on the podcast do not necessarily reflect the views of CII or its members. For more information on CII and its policies on corporate governance, please visit our website at www.cii.org.