We have what I think is our first decision interpreting the new DGCL 144: Ayers v. Foley, from VC Will.

This is a derivative action challenging a board’s award of compensation to itself, and an award of compensation to the company’s founder and Chair.  What is particularly amusing is that the company, Fidelity National Financial, is now organized in Nevada; its reincorporation became effective one day after the lawsuit was filed.  What is also amusing is that FNF’s first attempt to reincorporate to Nevada failed a shareholder vote; the company was only able to win shareholder approval by committing in its charter to adopting greater shareholder protections than Nevada provides. 

So, the case.  With respect to the award to the board, the defendants conceded that this was an interested transaction, with no cleansing mechanisms, and demand was excused; the only argument they made was that plaintiffs’ complaint did not make it “reasonably conceivable” that the compensation was not entirely fair.  That argument was a heavy lift, and VC Will rejected it; those claims will proceed.

The real action concerned the grant to the company founder and chair.  He held only 3.6% of the stock; there was no argument he was a controlling shareholder. 

So the issue for the court was whether demand was excused under Rule 23.1. Which meant, VC Will had to decide whether a majority of the board was disinterested and independent under the standard set forth in United Food & Commercial Workers Union & Participating Food Industry Employers Tri-State Pension Fund v. Zuckerberg.

But, nine out of eleven board members had been identified as independent under NYSE listing rules.  And under new DGCL 144(d)(2):

Any director of a corporation that has a class of stock listed on a national securities exchange shall be presumed to be a disinterested director with respect to an act or transaction to which such director is not a party if the board of directors shall have determined that such director satisfies the applicable criteria for determining director independence from the corporation … which presumption shall be heightened and may only be rebutted by substantial and particularized facts that such director has a material interest in such act or transaction or has a material relationship with a person with a material interest in such act or transaction.

So the question for VC Will was, does this provision extend to demand excusal, or is it solely limited to cleansing interested transactions, which is the subject of DGCL 144?

She concluded that it does extend to demand excusal:

Where the General Assembly intended a provision to apply only within Section 144, it said so expressly.  In Section 144(d) itself, the legislature took care to confine a provision to specific paragraphs—and did so within paragraph (d)(7), where it named three other paragraphs to which the rule applies.  Similarly, the preface to Section 144(e) states that its definitions are “[f]or purposes of this section.”  Section 144(d)(2) contains no such limiting language.

If “provisions are expressly included in one part of a statute, but omitted from another, it is reasonable to conclude that the legislature was aware of the omission and intended it.”  The purposeful omission of limiting language in paragraph (d)(2) illustrates the legislature’s intent that the heightened presumption apply broadly, including when assessing director disinterestedness for purposes of Rule 23.1.  Reading paragraph (d)(2) to apply solely within Section 144 would also deprive the limiting language in paragraph (d)(7) and subsection (e) of independent meaning, contrary to settled principles of statutory construction.

Although Rule 23.1 already requires particularized facts to rebut the presumption of independence and disinterestedness, Section 144(d)(2) goes further by requiring both “substantial and particularized facts.” The inclusion of the additional modifier suggests a legislative intent to strengthen the presumption beyond the Rule 23.1 standard.

In other words, VC Will read the legislature’s intent for DGCL 144(d)(2) to be incorporated into demand excusal, because nothing in DGCL 144(d)(2) says its definition of disinterestedness is to be confined solely to that particular section of the Code.  Other provisions of DGCL 144, such as DGCL 144(e), are so confined. From there, VC Will went on to find demand was not excused with respect to the founder compensation.

Fine.

But later in the opinion….

The statute requires “substantial and particularized facts” demonstrating either “a material interest” in a transaction or “a material relationship” with an interested person…. See also id. § 144(e)(7), (8) (defining “[m]aterial interest” and “[m]aterial relationship”).

Um. Didn’t we just agree that DGCL 144(e) is limited to DGCL 144?  That’s what distinguishes it from DGCL 144(d)?  But DGCL 144(e) ended up getting imported into Rule 23.1 via DGCL 144(d) nonetheless, which suggests the inquiry can’t be as simple as trying to divide the pieces of DGCL 144 into those that apply to “this section” and those that apply more broadly.

Look, this is a difficult problem.  On the one hand, DGCL 144 does not in any way incorporate or reference Rule 23.1  It even uses different terminology than the caselaw developed under Rule 23.1: Rule 23.1 caselaw distinguishes between “independence” and “disinterestedness,” and while DGCL 144 clearly includes both concepts substantively, it combines them under a single rubric, “disinterest” (which makes it difficult to teach, by the way).  That might be a reason to treat the two as wholly separate.

On the other hand, from a judicial perspective, it is uncomfortable to have a definition of independence for cleansing purposes that is distinct from the definition of independence for the purposes of demand excusal, each of which is subject to a distinct particularity standard.

It is even more uncomfortable when you consider that demand excusal is, as a practical matter, an inquiry into whether a particular type of decision was cleansed – the decision whether to bring a lawsuit.  That is, most potentially “interested” board decisions involve actual contracts – to buy something, to sell something, to grant compensation.  In the demand context, it’s a different type of potentially interested board decision – the decision whether to sue.  Either way, though, we’re talking about what is sufficient to cleanse that decision such that the court will defer to it. Viewed that way, there is no reason the cleansing procedures for the two – actual transactions/contracts, versus decisions whether to bring a lawsuit – should differ at all.

But if that’s the logic, then we have to ask whether the full suite of new DGCL 144 cleansing procedures applies to demand excusal.  And that would create real upheaval.  For example, DGCL 144 permits cleansing of transactions where the board is majority-conflicted via the use of a committee.  But in the context of demand excusal, if the board is majority-conflicted, the use of a special litigation committee is subject to special scrutiny by the court.  Not to mention, of course, DGCL 144 has a whole new set of rules for the construction of such a committee.

I don’t know the right answer for any of this.  But I think with respect to the narrow question before VC Will – how to evaluate independence – the path of least resistance might have been to say that DGCL 144(d)(2) simply incorporates the particularity standards already employed by Delaware courts under Rule 23.1. Granted, the “substantial” modifier of DGCL 144(d)(2) is new, but I don’t think the 23.1 caselaw finds a lack of independence based on insubstantial facts.  And interpreting DGCL 144(d)(2) through Rule 23.1’s lens causes the least disruption, because there’s no need to invent a whole new standard.  Rule 23.1 demand excusal does not change; what changes is how allegations of lack of independence are evaluated in cases not governed by Rule 23.1, and that will be done by reference to existing caselaw.  I take no position, though, on whether that would have made a difference in this particular case.

And another thing. New Shareholder Primacy podcast is up!  Me and Mike Levin talk about the Supreme Court’s decision in FS Credit Opportunities v. Saba Capital Master Fund. Here at Spotify; here at Apple; and here at YouTube.

We’re past the bulk of proxy announcements and waiting on votes to come in at this point. I expect we’ll continue to see some action this year, but I don’t expect the pace to be as rapid.

For context, I looked back at roughly around this time last year. At that point, I was only tracking movement to Nevada and had 17 announcements. By the end of the year, it was up to 28 announcements of some kind or another for Nevada. I had 8 for Texas. That came to roughly 36 overall for Texas and Nevada.

This list has not changed substantially from last week, but we’re at 29 announcements between Texas and Nevada for this year already. On this update, we only have a few more now since the last list about two weeks ago. It’s two more that I didn’t have on my list: Granite Ridge and DeFi Development Corp. This is the updated sheet for folks that want to see the full set.

Company NameStock TickerOrigination StateDestination State
1. TruGolfTRUGDelawareNevada
2. Forian, Inc.FORADelawareMaryland
3. LQR HouseYHCNevadaDelaware
4. CBAK EnergyCBATNevadaCayman Islands
5. Cheetah NetCTNTNorth CarolinaDelaware
6. GalectoGLTODelawareCayman Islands
7. Resolute Holdings Management, Inc.RHLDDelawareNevada
8. Forward Industries, INCFWDINew YorkTexas
9. EQV Ventures AcquisitionFTWCayman IslandsDelaware
10. Datadog, Inc.DDOGDelawareNevada
11. Haymaker Acquisition Corp 4HYACCayman IslandsDelaware
12. CDT EquityCDTDelawareCayman Islands
13. eXp World HoldingsEXPIDelawareTexas
14. ArcBest CorpARCBDelawareTexas
15. Texas Capital BancsharesTCBIDelawareTexas
16. ExxonMobil Corp.XOMNew JerseyTexas
17. NL IndustriesNLNew JerseyDelaware
18. ClearOne IncCLRODelawareNevada
19. Liberty Media CorporationFWONA, FWONB, FWONKDelawareNevada
20. The LGL Group, Inc.LGLDelawareNevada
21. TTEC Holdings, Inc.TTECDelawareTexas
22. Weatherford International plcWFRDIrelandTexas
23. Dream Finder HomesDFMDelawareTexas
24. Voyager TechnologiesVOYGDelawareTexas
25. GPGI, Inc.GPGIDelawareNevada
26. FirstCash Holdings, Inc.FCFSDelawareTexas
27. AerSale CorpASLEDelawareTexas
28. Natural Gas Services Group, INCNGSGColoradoTexas
29. Archer Aviation IncACHRDelawareTexas
30. Sonoma Pharmaceuticals, IncSNOADelawareNevada
31. Samsara IncIOTDelawareNevada
32. Dell TechnologiesDELLDelawareTexas
33. Spruce Power Holding CorpSPRUDelawareTexas
34. King ResourcesKRFGDelawareNevada
35. Thunder Power HoldingsAIEVDelawareNevada
36. NexGel, Inc.NXGLDelawareNevada
37. DeFi Development Corp.DFDVDelawareNevada
38. Granite Ridge ResourcesGRNTDelawareTexas

Scope Note

A quick note on the numbers after a reader question came in. This list has a few entries from firms that announced in 2025 but didn’t finalize until 2026 (Forian, Cheetah, Galecto, & Haymaker). If you wanted to adjust for announcements that happened in 2026 only, you’d pull them out.

Graphics

As before, I asked Claude to help generate graphics to make the data easy to understand at a glance.

Origin & Destination

Count v. Market Cap

Here, ExxonMobil and Dell were big moves.

Stated Delaware Franchise Tax Amounts

The franchise tax figure is something I’m curious about for microcap and under market segment. It’s not going to be a material thing for large corporate filers, but it’s worth keeping an eye on on for that market segment.

Final Notes

Ultimately, not much has changed in the last few weeks. Unless the pace picks back up, I’m likely to switch to putting this out about once a month. In the interim, I’ll get the the rest of the fields in the spreadsheet updated and filled in and see if we can glean any other insights from that data. If you think of any other fields that would be helpful to add, please send them through. For example, I’m going to add a field tracking where the company is headquartered.

I may also put together an estimated franchise tax number for corporations that announced moves from Delaware without disclosing the figure.

Everyone’s talking about the possibility SpaceX will acquire Tesla, presumably in a stock merger, likely using the nonvoting shares SpaceX has authorized but unissued in its charter.

If that happens, the question is – who wins, SpaceX shareholders, or Tesla shareholders, or will the price be perfection itself?

If you assume that Elon Musk’s personal interests will play a role here, then part of the pricing will have something to do with his relative financial stake in each company, which I am in no way going to try to calculate (also, I suppose he might have tax considerations, again, not going to calculate). But legally, there are very good reasons why the price would favor Tesla shareholders.

First, Elon Musk’s pay package at Tesla awards him around 35 million shares when he hits certain market cap milestones, coupled with operational milestones. But if Tesla is acquired, the operational milestones disappear, and the merger price becomes the market cap. Which means, if Tesla is acquired for a nominal price of $2 trillion, he gets an additional 35 million Tesla shares (which, in a stock for stock merger with SpaceX, convert to SpaceX shares). If Tesla is acquired for 2.5 trillion, that’s 70 million shares, and so forth. So he has good reason to want to hit those numbers if Tesla is acquired.

Second, if SpaceX issues stock to buy Tesla, even if doing so requires a SpaceX shareholder vote (which would be under NASDAQ rules, and it’s likely but I’m not sure), Musk controls the votes – he can be sure of SpaceX-side approval. But he doesn’t control the votes at Tesla. He needs to persuade Tesla shareholders, especially if they get no-vote shares, so that suggests a Tesla-favorable price.

Third, assuming Texas law tracks Delaware on this, if SpaceX acquires Tesla, that’s a conflict transaction of the sort shareholders on both sides might sue over (when Shari Redstone caused CBS to combine with Viacom, both sets of shareholders sued, for example). But on the SpaceX side, that’s a derivative lawsuit; shareholders must have 3% to file, and that’s, you know, in excess of $52 billion depending on where SpaceX closes today. But on the Tesla side, it’s not derivative – that’s direct, and that means, there is no 3% barrier to suing. Plus, Tesla has not (yet) attempted to bar class actions the way SpaceX has. So there’s much more litigation risk on the Tesla side, even if the standard of proof would require plaintiff-shareholders to show fraud or intentional misconduct.

Which means, my tentative bet is that the cheapest way to get exposure to SpaceX at this time may be to buy Tesla, and wait for the merger.

Somehow, this keeps happening.

A company goes public with a dual class share structure – 10 votes per share for insiders, 1 vote per share for the public, something like that. 

But the company pays its employees in stock, so it issues more 1-vote shares.  Then maybe the company wants to make stock acquisitions – and it issues still more 1-vote shares.  The insiders want to monetize some of their stock, so they convert their 10-vote shares to 1-vote shares and sell them.

Eventually, there is a risk that the insiders’ 10-vote shares will no longer represent a majority.

The board could, I suppose, issue more 10-vote shares to the founders, but even if the charter permits that, it creates difficult questions.  How much should the founders pay for that extra control?  What’s a good price for it? 

When this first happened, the company was Google, and their solution was to amend the charter to create a new class of no-vote shares that could be issued for acquisitions and so forth without diluting the founders’ control.  (It was also an interesting end-run around the exchange listing rules that prohibit disparately reducing or restricting the voting power of traded shares, because, if anything, issuing new no-vote shares enhanced the voting power of traded shares, relative to their economic stake in the company.)

But it prompted a lawsuit in Delaware, with shareholders arguing that the board and the founders breached their fiduciary duties to shareholders by creating a whole new class of stock to perpetuate the founders’ control.  That lawsuit settled for additional limits on how the no-vote shares would be issued, but in the end, Google got its no-vote Class C shares, which now trade alongside the 1-vote Class A shares.

Mark Zuckerberg was so impressed with Google’s plan that he tried the same thing at Facebook.  To stave off a shareholder lawsuit, he agreed to negotiate with an independent special committee – and the shareholders turned up evidence that independent committee member Marc Andreessen was texting Zuckerberg a play by play of committee deliberations and coaching him on how to negotiate.  Ultimately, Zuckerberg dropped the idea.

Next there was Snap.  Snap went public with a tri-class structure.  The public received no vote shares, while the founders had 10 votes per share, and the founders and other insiders had additional 1-vote shares.  The charter specified that when the founders died, or relinquished most of their 10-vote shares, all shares would convert to 1 vote per share.  But the founders wanted to give away stock to charity while maintaining control!  So they proposed charter amendments that changed the conditions under which the share class structure would collapse, such as, among other things, requiring a sell down of both the 10-vote shares and the 1-vote shares.  Shareholders sued, alleging that the charter amendments had the effect of changing the rights of the public no-vote shares, and therefore could not be effected without a separate vote of the public shareholders under DGCL 242. That case also settled when Snap withdrew the proposed amendments. 

There may be other similar examples but the latest entry in the genre concerns Cloudflare, which is now the subject of at least 3 pending complaints that will presumably be consolidated into a single case.  Fourth verse same as the first: The company went public with a dual class structure, whereby the founders had 10 votes per share and the public had 1 vote per share; the charter provided that when the founders’ holdings of 10-vote shares dropped below a certain threshold, everything became 1-vote per share; the founders eventually got antsy about that bargain and proposed a recapitalization.  After the founders got independent special committee approval, the board proposed charter amendments that create a new class of no-vote shares, and a new class of golden shares with no economic rights but that have 9 votes per share.  All shareholders – public and insiders alike – get what is essentially a dividend of 1 no-vote share per outstanding share.  Then, the founders exchange each 10-vote share for one 1-vote share plus 1 golden share.  Meaning, the founders end up with golden shares to maintain control, and monetizable 1-vote and no-vote shares, though if the founders sell enough of their 1-vote stake, the share structure collapses into a single class.  There are also certain conditions involving the founders remaining with the company, and so forth.

Obviously, the public shareholders are claiming this is a breach of fiduciary duty and a transfer of control rights from the public to the founders, but here’s the thing.

We all remember (boy do we remember) the dust-up in Delaware about revising DGCL 144 to make it easier for controllers cleanse conflict transactions, right?

Well, new DGCL 144 has a carveout: its cleansing procedures do not

Limit judicial review for purposes of injunctive relief of provisions or devices designed or intended to deter, delay, or preclude a change of control or other transaction involving the corporation or a change in the composition of the board of directors;

The most obvious application of that carveout was for activist situations, but the plaintiffs are arguing that because Cloudflare is also a case about a provision or device “designed or intended to deter, delay, or preclude a change of control,” the new cleansing procedures do not apply, and we are back in MFW land.

For those who want to keep track of all this, the case numbers are 2026-0772, 2026-0763, and 2026-0734, and it looks like VC Laster caught them.

In any event, I assume founders have now learned their lessons and these scenarios will eventually fade from view; SpaceX, for example, is going public with an authorized class of no-vote shares in its charter, which presumably will be used for acquisitions and whatnot, so that Musk’s voting power does not have to be diluted with new issuances of 1-vote shares.

So as long as we’re talking about semi-annual vs quarterly reporting – It has long been observed that the disclosure obligations of the federal securities laws function as sub rosa substantive governance regulation. The obligation to report necessarily carries with it an obligation of oversight; you can’t report what you don’t know.

Thus, a switch to semi-annual reporting may not simply mean less information to investors; it loosens the obligations of boards, and managers, to oversee the company. 

A new paper by Anne Tucker and Timothy Lytton demonstrates this point in the context of mutual fund disclosures.  After interviewing a variety of market players, including investment advisers, fund managers, compliance officers, and fund counsel, they conclude that it’s less important whether anyone reads the disclosures than the fact that the process of drafting them triggers legal and professional norms which end up substantively shaping mutual fund products.

We can extend the reasoning to the SEC’s announcement that it would pull back on enforcement over things like “retention of books and records, that consumed excessive Commission resources not commensurate with any measure of investor harm.”

Sure, maybe each individual violation doesn’t result in investor harm, but when companies know the “small” stuff won’t be sweated, they don’t build out the compliance capacity that’s necessary to catch the big stuff. (Unrelated: After replacing multiple general counsels at Tesla, Elon Musk has apparently abandoned the concept at SpaceX.)

Unfortunately, though – if the SEC does permit semi-annual reporting – there’s not a lot anyone can do to challenge it.  When the SEC adopts new regulations, the regulated entities can sue, claiming that the regulation was irrational or otherwise improper.  When it repeals them, though, it’s hard to imagine who would have standing to bring a claim, no matter how irrational the process.

There is no other thing.  No new Shareholder Primacy podcast this week; back soon!

I am pleased and proud to report the recent publication of an article I coauthored last year with a former student, Cody Dethlefs, for the Stetson Law Review‘s 2025 symposium on Prosecutorial Discretion & White Collar Crime. The article, The Fraud Remains the Same . . . Or Does It?, explores blockchain frauds, combining my experience with securities regulation considerations and Cody’s with bank regulation. The SSRN abstract is as follows:

Although blockchain technology has proven itself to be useful and has significant potential for expanded usage, certain blockchain applications pose fraud and systemic risks. This article identifies and assesses financial fraud committed in or in connection with blockchain transactions as a form of white-collar crime. In some cases, criminal activity is facilitated—or even originated—by blockchain technology. Yet in other cases, criminal activity is merely hosted on a blockchain. Law enforcement activities relating to blockchain fraud are similarly both conventional and unique.

As the blockchain environment expands, fraudsters will indisputably continue to innovate. It will be incumbent upon enforcement agents to keep pace in an environment complicated by rapid technological advances, privacy and security protections, and cross-border activity. Increasing reliance on blockchains for financing and other elements of global commerce makes blockchain regulation and enforcement a high priority for the United States and other governments around the world.

Our work on this fascinated both of us. The scope and extent of blockchain fraud offers many intersections with business and criminal law topics. I already have been able to use insights in my teaching. I hope the work is also useful to some of you.

The pace of announcements has slowed a bit since the last update. My list now has 36 entries, five more since the last update. We have also had some significant vote results come in.

Company NameStock TickerOrigination StateDestination State
1. TruGolfTRUGDelawareNevada
2. Forian, Inc.FORADelawareMaryland
3. LQR HouseYHCNevadaDelaware
4. CBAK EnergyCBATNevadaCayman Islands
5. Cheetah NetCTNTNorth CarolinaDelaware
6. GalectoGLTODelawareCayman Islands
7. Resolute Holdings Management, Inc.RHLDDelawareNevada
8. Forward Industries, INCFWDINew YorkTexas
9. EQV Ventures AcquisitionFTWCayman IslandsDelaware
10. Datadog, Inc.DDOGDelawareNevada
11. Haymaker Acquisition Corp 4HYACCayman IslandsDelaware
12. CDT EquityCDTDelawareCayman Islands
13. eXp World HoldingsEXPIDelawareTexas
14. ArcBest CorpARCBDelawareTexas
15. Texas Capital BancsharesTCBIDelawareTexas
16. ExxonMobil Corp.XOMNew JerseyTexas
17. NL IndustriesNLNew JerseyDelaware
18. ClearOne IncCLRODelawareNevada
19. Liberty Media CorporationFWONA, FWONB, FWONKDelawareNevada
20. The LGL Group, Inc.LGLDelawareNevada
21. TTEC Holdings, Inc.TTECDelawareTexas
22. Weatherford International plcWFRDIrelandTexas
23. Dream Finder HomesDFMDelawareTexas
24. Voyager TechnologiesVOYGDelawareTexas
25. GPGI, Inc.GPGIDelawareNevada
26. FirstCash Holdings, Inc.FCFSDelawareTexas
27. AerSale CorpASLEDelawareTexas
28. Natural Gas Services Group, INCNGSGColoradoTexas
29. Archer Aviation IncACHRDelawareTexas
30. Sonoma Pharmaceuticals, incSNOADelawareNevada
31. Samsara IncIOTDelawareNevada
32. Dell TechnologiesDELLDelawareTexas
33. Spruce Power Holding CorpSPRUDelawareTexas
34. King ResourcesKRFGDelawareNevada
35. Thunder Power HoldingsAIEVDelawareNevada
36. NexGel, Inc.NXGLDelawareNevada

Here is an updated sheet with everything I’ve collected so far. I’ve also had Claude generate some graphics.

Origin & Destination

Although I’ve been looking closely at the companies coming to Nevada or Texas to understand trends, I hadn’t closely looked at the companies going to Delaware to see if I could discern any patterns yet. The five companies picking Delaware so far this year are:

  • LQR House (NV –> DE)
  • Cheetah Net (NC –> DE)
  • EQV Ventures (Cayman –> DE)
  • Haymaker Acquisition Corp. 4 (Cayman –> DE)
  • NL Industries (NJ –> DE)

EQV Ventures and Haymaker are both de-SPACs from the Caymans to Delaware. I haven’t excluded them from the data set at this point, but if you put them to the side, we’re looking at 34 reincorporations with Texas at 15, Nevada at 12, and Delaware at 3, and the Caymans at 3.

Movement Over Time

This is a neat visualization. The first four announcements in the dataset are all late 2025 with votes happening in 2026.

Different Visualization on Origin & Destination

This visualization captures a big difference between Texas and Nevada. Texas has been picking up corporations from different places while Nevada has only picked up companies leaving Delaware.

Redomiciliation Count vs. Market Cap

This is another fun comparison. Texas and Nevada have the bulk of the movement and the money in terms of rough market cap. Of course, Exxon and Dell account for over 85% of the overall market cap here. Exxon is just a big one.

Approval Margins

Here, the approval margins are calculated as votes in favor as a percentage of votes cast. This chart does not include the moves via written consent.

I can refine my numbers after this for the next update. In contrast to my little chart here, Exxon’s 8-K shows Exxon as having secured 71.2% of the vote and this chart shows them at 61%. The difference is because Exxon calculated the percentage of votes in favor vs. against–as it should have. At the time, Exxon was a New Jersey corporation and New Jersey’s law runs on votes actually cast at a meeting. Delaware runs off of a majority of the outstanding equity so it’s going to be a higher hurdle.

How you calculate these percentages changes how we see what’s happening. My chart lumps abstentions and broker non votes together even though many companies break them out separately. I’m going to need to go back and update the chart to include total equity outstanding as a separate column after this.


Submissions are now open for the 2026-27 series of the online Law & Finance Workshop. Submissions are due by the end of the day on Friday, July 3, 2026.

The Law & Finance Workshop was launched in Spring 2025 to create a space for more frequent discussion of scholarly works-in-progress in the field of law and finance, and to foster community among scholars working in this area. The workshop meets online once per month during the fall and spring semesters and is open to all interested scholars. Each workshop features a paper presentation followed by comments from a discussant and Q&A with participants. 

We welcome submissions from scholars across all relevant disciplines that examine the role of law and regulation in finance broadly defined, including household finance, corporate finance, and public finance. Interested scholars should submit their abstracts using this form no later than EOD onFriday, July 3, 2026. Selected authors must be ready to make complete drafts of their papers available for distribution one week prior to the scheduled date of the workshop.  

We look forward to seeing you in the fall.

Nikita Aggarwal, Caroline Bradley, & George Georgiev (organizing committee)

Friend-of-the-BLPB George Mocsary recently made me aware of his fun essay reproduced below. He also cleverly generated the related above image using ChatGPT, noting in sending it to me that “Roger Sherman and Robert R. Livingston, who are the fictitious Treasurer and Secretary signing the bill, were part of the Committee of Five who drafted the Declaration of Independence. The other three were John Adams (on this mock-up), Thomas Jefferson ($2 bill), and Ben Franklin ($100 bill).”

I love all of this. It is always interesting to see what business law profs think about and do outside the norm of their teaching, scholarship, and service. Enjoy George’s essay!

++++++++++++++++++++

A Modern Currency for a Modern Economy: Retiring the Single, Embracing the Coin, and Thinking Bigger

George A. Mocsary

Every day, Americans reach into their wallets and pull out a piece of currency that is fundamentally failing them and their nation: the one-dollar bill. We hold onto paper out of habit, resisting the mathematical realities of our monetary system. As we navigate a modern economy, the United States relies on an outdated physical currency structure. It is time for a comprehensive overhaul of our cash.

To bring our currency into the twenty-first century, the United States should execute a multi-step reform. First, we should stop printing the $1 bill. Second, we should replace it with the far more durable $1 coin. Third, we should elevate the $2 bill to serve as our standard low-denomination paper currency. Finally, we need to print bills significantly larger than the $100 note—the $500 bill or a novel $250 bill to celebrate the nation’s 250th anniversary. This is not just a matter of convenience. It is a matter of fiscal responsibility and international competitiveness.


The Cost of the Paper Single

The romanticism attached to the one-dollar bill is blinding us to its economic inefficiency. We currently treat our lowest paper denomination as a disposable commodity. According to the Federal Reserve, it costs approximately 4.1 cents to print a single $1 note. While that may sound inexpensive, the hidden cost lies in its shockingly short lifespan.

Due to the intense wear and tear of daily transactions, a $1 bill has an estimated lifespan of about seven years. The Federal Reserve must continuously order billions of new $1 notes each year to replace the ones that have been damaged, mutilated, or worn beyond recognition. This creates an expensive cycle of printing, distributing, evaluating, and shredding currency. The Bureau of Engraving and Printing operates at maximum capacity to keep up, wasting millions of taxpayer dollars on a product designed to fall apart in less than a decade.


A Durable Alternative: The $1 Coin

The solution to the paper single’s inefficiency is already in our pockets: the coin. It is time to fully replace the $1 bill with the $1 coin.

Although minting a modern dollar coin costs the U.S. Mint roughly 12 cents, focusing solely on the initial production cost is short-sighted. The true metric of currency efficiency is its lifespan. A $1 coin’s estimated lifespan is at least 30 years. In the time it takes a single dollar coin to wear out, the Federal Reserve would have had to print, distribute, and destroy roughly four distinct $1 bills. Aggregating these costs across the billions of singles in circulation, the math becomes undeniable. Independent analyses, including past reports from the Government Accountability Office (GAO), have repeatedly indicated that transitioning to a $1 coin and retiring the paper note would yield large financial benefits for the federal government once the higher production costs of $1 coins are recouped after about six years.


Bridging the Gap: The Rebirth of the $2 Bill

A common objection to the $1 bill’s elimination is that Americans still want a small-denomination paper note for tipping, minor purchases, and general convenience. Carrying pockets full of metal can be cumbersome. Fortunately, the Treasury already produces the perfect compromise: the $2 bill.

By stopping the production of the $1 bill, the government can easily scale up the printing of the $2 note. This fulfills the public’s desire for a low-denomination paper option while cutting the printing and pocket volume of small notes in half. The $2 bill is already legal tender, already familiar to the public, and ready to be deployed. Elevating it from a novelty item to a transactional staple would ensure a smooth, painless transition away from the $1 note.


The Missing Tier: Why We Need Larger Denominations

While our lower denominations suffer from inefficiency, our upper denominations suffer from a different problem: inflation-driven irrelevance. Since 1969, the United States has not issued a bill larger than the $100 note. But what was once a symbol of wealth is now barely enough to cover a standard trip to the grocery store or a family dinner out.

The rest of the world has long understood the value of large-denomination physical currency. Even as digital payments rise, the Eurozone maintains high-value physical notes, including the widely used €200 note (and the €500 note, which remains legal tender even though issuance has stopped). Switzerland seamlessly circulates the 1,000-franc note. This high-value piece of currency acts as a highly trusted store of wealth.

These nations issue such large notes because physical currency, in addition to serving as a medium of exchange, is a vital store of value. The U.S. dollar is the world’s reserve currency. Billions of U.S. dollars are held overseas by individuals and institutions who trust the stability of the American government more than their own local banking systems.

When a government issues high-denomination currency, it benefits from seigniorage. Seigniorage is the difference between the cost of producing currency and its face value. It is profit made by a government by issuing currency, especially when that currency is held indefinitely as a store of value rather than actively circulated. $100 bills currently boasts a lifespan of 24 years, largely because people hoard them rather than spending them daily. Providing even larger denominations would increase this longevity and seigniorage benefit, firmly cementing the U.S. dollar as the premier physical asset in the world.


A Bold Proposal: The $500 Bill or the Semiquincentennial $250 Note

To address this glaring gap at the top of our currency ladder, the United States should resume issuing a $500 bill. It should instantly become the premier physical store of value, reducing the bulk required to hold cash reserves and generating unprecedented seigniorage benefits for the federal government.

However, if a leap straight to $500 feels too drastic for policymakers, there is a uniquely American alternative: the introduction of a new $250 bill, rolled out as a test to coincide with the nation’s 250th anniversary in 2026.

At first glance, a $250 bill might seem unorthodox. We are accustomed to currency scaling in units of ones, fives, tens, and multiples thereof. Yet the $250 bill would be remarkably easy for the American public to adopt for one simple reason: the quarter.

Americans have used the 25-cent coin for generations. The cognitive math required to use a $250 bill is identical to the math required to use a quarter, just scaled up: two quarters equal fifty cents; two $250 bills equal $500. Four quarters equal a dollar; four $250 bills equal $1,000. Because the fractional logic is already hardwired into the American consumer’s brain, the learning curve for a $250 bill would be practically nonexistent. Moreover, introducing it as a commemorative but fully functional circulating note for the Semiquincentennial would generate substantial public interest, driving adoption and excitement.


Efficiency over Nostalgia

The United States’ currency is perhaps the nation’s most recognizable symbol. But nostalgia should not trump economic efficiency. Printing paper $1 bills that tear and degrade in a mere seven years is a drain of resources for which the 30-year $1 coin offers a vastly superior alternative. By embracing the coin, reviving the $2 bill for small paper transactions, and finally acknowledging the reality of modern economics by introducing a $250 or $500 note, the United States can fundamentally modernize its monetary system.

The nation is capable of making these pragmatic adjustments. In late 2025, the United States Mint ended production of the penny, closing a 232-year chapter in American coinage. The rationale was simple and undeniable: spending nearly four cents to manufacture a one-cent coin was an unjustifiable waste of taxpayer resources. The public adapted quickly to the reality of cash rounding, proving that nostalgia is a poor excuse for bad economics.

It is time for the United States Treasury and the Federal Reserve to think bigger and mint smarter. The mathematical evidence is clear, the international precedents are proven, and the opportunity presented by the Semiquincentennial provides the perfect moment to build a currency system that reflects the strength, durability, and scale of the modern American economy.

No not that one.

I speak of the proposed redomestication of Natural Gas Corporation from Colorado to Texas. As Bloomberg reported, ISS recommended in favor of the move, even though it had recommended against Exxon’s move, which prompted accusations of opacity.

(Exxon, ludicrously, argued that Glass Lewis and ISS objected to its move because of their litigation over Texas’s proxy advisor law, conveniently ignoring that well before Texas moved to insulate corporate managers and instigated its war on proxy advisors, Glass Lewis objected to Tesla’s move, and ISS only tentatively recommended in favor, specifically on the understanding that Texas’s legal protections for shareholders were, at that time, comparable to Delaware’s. Also, I note, under Texas law – currently on hold on First Amendment grounds – merely for recommending a vote against management based on governance considerations, Glass Lewis and ISS would have had to announce publicly that they do not provide advice solely in the financial interests of shareholders and notify Ken Paxton of their recommendation.)

Anyhoo, ISS’s change of heart for Natural Gas is interesting and worth unpacking. Natural Gas Corporation currently has a staggered board, which can only be destaggered by an overwhelming vote of 80% of outstanding shares – an extremely high threshold that is difficult to meet in a public company. Directors can only be removed for cause, again with an 80% vote, and this provision, too, can only be eliminated with an 80% vote. But, when corporate law closes a door, some way it opens a window, and in this case, that window is, nothing in the charter or bylaws of Natural Gas Corporation require a supermajority to convert into a different entity: a conversion can occur by a simple majority vote. Of course, a conversion requires new organizational documents, which are treated as part of the plan of conversion. So, Natural Gas Corp proposes to convert to a Texas entity, and the new Texas organizational documents will remove the stagger, remove the supermajority vote requirements, and permit shareholders to remove directors with or without cause by a simple majority vote.

Natural Gas’s board is not proposing to adopt Texas’s opt-in limits on derivative litigation (i.e., to require the plaintiff to hold 3% of shares), or Texas’s limits on shareholder proposals (3% or $1 million holding requirement), but it isn’t – as ArcBest did – promising to never unilaterally adopt these provisions in the future. And, of course, Natural Gas’s board will automatically reap the benefit of Texas’s high threshold for insider liability, namely, a showing of “fraud, intentional misconduct, an ultra vires act or a knowing violation of law.”

Given the givens, ISS concluded that benefits to shareholders of the improved governance structure were worth the loss of other rights, which seems an entirely reasonable conclusion.

That said, it is worth noting that Natural Gas could have achieved the same benefits to shareholders by reincorporating to Delaware, and it certainly could have committed in its charter to never adopt Texas’s optional holding requirements for proposals and litigation. By choosing Texas, the board is offering shareholders a cynical trade: we’ll enhance your voting power in exchange for greater insulation from liability.

And another thing. New Shareholder Primacy podcast is up!  Me and Mike Levin talk about, naturally, the SpaceX S-1. Here at Spotify; here at Apple; and here at YouTube.

And still another thing. In connection with the release of his book, Corporate Power and the Politics of Change, Rutgers law professor Matteo Gatti is hosting a series of podcasts with corporate law professors exploring the book’s themes. Matteo was kind enough to invite me to participate; there are also – or will be soon – episodes with Stephen Bainbridge, Jill Fisch, Swarnodeep Homroy, Elisabeth Kempf, Katharina Pistor, Mark Roe, Veronica Root Martinez, Roy Shapira, Tim Smith, and Reilly Steel.