By Liz Dunshee

Companies approaching or having recently completed an IPO often face increased scrutiny around transactions involving insiders, investor-appointed directors or controlling stockholders. To help boards and management teams navigate these issues, Courtney Tygesson and I put together a comparative playbook outlining how Delaware and Nevada law each address conflicted transactions – and what steps companies can take to reduce litigation risk.

Our playbook provides:

  • Practical guidance to identify conflicts
  • Guidelines for structuring special committees
  • A side-by-side overview of “safe harbor” standards in both states
  • Tips for modeling ownership thresholds and documenting robust processes
  • A quick-reference cheat sheet summarizing key legal differences

Whether you’re preparing for an IPO, refining post-IPO governance or evaluating a transaction involving potential conflicts, this guide can help you spot common missteps on the front end – and save you from future headaches.  

Since the side-by-side comparison highlights how Delaware’s and Nevada’s laws shape the level of scrutiny future transactions may receive (and the accompanying litigation risks), you can also use the playbook to compare the two states as incorporation options. However, keep in mind that the likelihood of conflicted transactions varies by company – and that this is just one factor in the domicile decision. We’ve discussed other factors in previous blog posts:

Access the full playbook on IPO GO. As the playbook illustrates, if there’s any chance a transaction would be considered “conflicted,” it’s important to proceed carefully. Contact your Cooley counsel to apply the playbook principles to specific situations.

For more guidance on issues affecting late-stage private through newly public companies, check out the full array of our IPO GO tools and resources:

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