A Reason To Reincorporate In Nevada (Or California Or Delaware)?

Why read the papers when you can watch the video?

In this month’s issue of California Lawyer magazine, Thomas Brom writes about an unusual opportunity to watch an arbitration proceeding between a Canadian gold mining company, PacRim Cayman LLC, and the Republic of El Salvador. The proceeding was held at the World Bank’s International Centre for Settlement of Investment Disputes. You can watch the hearing here (see article below for link). The dispute concerns alleged violation of the Dominican Republic-Central American Free Trade Agreement of 2005 (DR-CAFTA).

Will reincorporate for treaty rights?

Note that I referred to PacRim as a “Canadian gold mining company”. There’s the rub. Canada is not a party to DR-CAFTA. According to Mr. Brom’s article, the Republic of El Salvador is claiming that the company “reincorporated” in Nevada to gain jurisdiction under the treaty. (PacRim’s name suggests that it is a limited liability company, not a corporation, and the Nevada Secretary of State’s website lists a LLC by the same name.) This is the first example that I’ve heard of someone incorporating in a state for the purpose of availing itself of a U.S. treaty.

Please see full article below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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