In a new article, professor of law Wendy Gerwick Couture aims for "a fuller understanding of Nevada corporate law, both substantively and theoretically, as compared with Delaware corporate law".  For the title and them of her article, Professor Couture has coined the term "Nevadaware divergence" which refers to the differences between the two state's corporate laws.  Her article focuses on three areas:  exculpation of directors and officers; appraisal rights; and freeze-out mergers.  She concludes that the states share common priorities, but have struck different balances

Across the board, Nevada more than Delaware prioritizes the policy goals of minimizing the negative impacts of potential monetary liability on officers and directors (such as discouraging qualified individuals from serving or making risky decisions) over the competing policy goals of deterring breaches of fiduciary duty, compensating shareholders and corporations for fiduciaries’ breaches, and creating incentives for minority-shareholder protections.  One would expect shareholders to include these potential benefits and risks when deciding whether to invest in a Nevada corporation and when valuing its shares.  Ultimately, investors will decide whether the balance that Nevada has struck, albeit divergent from Delaware’s, is an attractive balance of the countervailing policies underlying corporate law for some firms and, if so, at what price.

As I have previously observed, one hurdle that Nevada faces in attracting converts is that lawyers tend to go with what they know.  As more articles, such as Professor Couture's, are published, lawyers may become more comfortable in advising clients to reincorporate in the Silver State.

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