Just reading the Harvard Governance Blog's summary of the recent amendments to their corporate law (cause it's a summer morning, don't @ me). Texas says stuff like they want to be friendliest state for business. They want to compete for businesses to relocate there, etc. But, it's really a bunch of nonsense. I'm convinced they have no idea what market they are in. I mean, they say they are competing against Delaware for incorporations, but are they really?
In fact, they aren't competing against Delaware, they are competing against Nevada! The corporate law amendments they recently adopted mimic the law of Nevada and not the law of Delaware. For example, in order to sustain a shareholder claim against a director you have to have Nevada-like facts:
To prevail in a cause of action claiming a breach of duty, the claimant must (a) rebut one or more of these presumptions and (b) prove (i) the act or omission was a breach of the person’s duties as a director or officer and (ii) the breach involved fraud, intentional misconduct, ultra vires acts, or knowing violations of law.
That's Nevada, right? Fraud, intentional misconduct, ultra vires or knowing violations of the law. What signal does it send to investors if the board proposes to move from Delaware (especially after SB 21) to Texas? Nothing good for minority investors, that's for sure.
I mean it seems obvious that the total accessible market for Texas corporations includes only those firm already in or considering Nevada for incorporation. That doesn't mean Delaware can't be afraid of ghosts, because they clearly area. It just means that Texas is wandering down into a lonely gulch with bandits on the ridges. Good luck.
-bjmq