Nevada Push for a Business Court Vetted by State Justices (1)

Nevada’s push for Delaware companies to reincorporate in the state will face new scrutiny, as it looks to set up a dedicated business court in the coming months.

The Nevada Supreme Court on Tuesday will hold a public hearing on plans for a commission to craft rules for the business court, which will have judges who only decide cases involving shareholder rights, mergers and acquisitions, and other corporate issues. Nevada currently has a business case docket that’s handled by judges who also can be responsible for other legal matters.

The new venue for resolving corporate law cases is expected to begin operations by 2026, according to Nevada Supreme Court Chief Justice Douglas Herndon.

The state’s work to stand up the business court comes as venture capital firm Andreessen Horowitz, media company AMC Networks Inc., and other companies have said this year they’re leaving Delaware to reincorporate in Nevada. Delaware’s Court of Chancery, the state’s longstanding forum for corporate legal disputes, has injected an “unprecedented level of subjectivity” into judicial decisions, Andreessen Horowitz officials said in July.

The new court needs judges well-versed in business law with the resources to move quickly, said Benjamin Edwards, a University of Nevada, Las Vegas, law professor. Such a venue can help ensure Nevada provides a strong alternative to Delaware or Texas, which drew Tesla Inc. last year, said Edwards, who has tracked companies reincorporating in the state.

“What Nevada has got to do is make sure that people trust that they’ll be able to get a fair resolution under Nevada law in a reasonable amount of time through the Nevada court system,” he said.

Texas set up its business court system in 2024, giving its first final judgment in a case in June. Lawyers have filed more than 140 cases in the Texas business courts so far.

Herndon in July filed a petition seeking the Nevada Supreme Court’s approval for the commission to work out the rules for his state’s business court, including how its judges will be selected.

The petition came after the Nevada legislature in May approved a resolution that proposed the creation of the business court through an amendment to the state’s constitution, a process that involves more votes by lawmakers and a referendum before voters.

The high court “can address the timeliness and efficiency of judicial review of business cases, eliminate the need to amend the constitution and the uncertainty associated with waiting years to see if the resolution gets approved,” Herndon said in May.