weather icon Clear

Tripadvisor gives Nevada top rating, will move legal home to state

Updated February 23, 2024 - 4:29 pm

Tripadvisor Inc. can move its incorporation to Nevada, a Delaware judge ruled Tuesday, in the latest example of billionaires moving their companies’ legal homes to the state.

Chancery Court Judge J. Travis Laster declined to block the online review and booking agency’s move to the west but will still allow investors to continue their lawsuit because monetary damages could be warranted.

In the suit first filed in November 2023, minority shareholders argued reincorporation in Nevada would be unfair because there are fewer litigation rights for them and greater rights for company representatives like directors, such as chairman Greg Maffei. (Maffei is also CEO of Liberty Media, owners of Formula One.)

Adam Chodorow, a tax law professor at Arizona State University, said the case questioned whether moving to Nevada stripped investors of some of the rights they had in Delaware, where nearly 70 percent of Fortune 500 companies are legally domiciled.

“The question in that case was, once you’ve incorporated in Delaware, do you have a duty not to leave if leaving would harm the minority?” Chodorow said. “Is that a breach of duty to the minority shareholders? It’s a really interesting question.”

Tripadvisor did not immediately respond to a request for comment.

Maffei and Tripadvisor are not the only billionaires and companies considering a move out of the state. Elon Musk moved the legal corporate home of his brain implant company, Neuralink, to Nevada this month. He is also fighting to move Tesla to Texas after the Delaware Chancery Court struck down his $56 billion compensation package on Jan. 30. Both states have promoted themselves as alternatives to Delaware.

McKenna Ross is a corps member with Report for America, a national service program that places journalists into local newsrooms. Contact her at mross@reviewjournal.com. Follow @mckenna_ross_ on X.

Don't miss the big stories. Like us on Facebook.