Nabors Shareholders Approve Offshore Move

by Mike Godfrey, Tax-News.com, Washington

19 June 2002

Following US District Court Judge Lee Rosenthal's announcement on Friday that a temporary restraining order preventing global land-drilling contractor, Nabors Industries from reincorporating in Bermuda has been denied, the final result of the shareholder vote on the topic was revealed.

The shareholder vote commenced late last week despite the fact that a formal ruling had not yet been issued, and the Bermuda Royal Gazette reported on Monday that the Delaware-based company's shareholders had approved a move to Bermuda by around 65%.

However, opponents to the move say that they are not beaten yet. Labor organisations, AFL-CIO and the Central Laborer's Pension fund have both objected to the move, arguing that the rights of shareholders are substantially reduced in Bermuda, and accusing Nabors of being the only company among the recent wave of expatriating organisations to fail to detail the potential pitfalls of an offshore reincorporation as well as the benefits.

According to the Royal Gazette, Steve Rosenberg, the Nabors shareholder who brought the class-action suit demanding the restraining order is currently considering his options in the wake of Judge Rosenthal's decision and the results of the vote.

However, according to his lawyer Lee Squitieri, possible courses of action include making an emergency appeal to the 5th Circuit Court of Appeals, or filing for a preliminary injunction if Nabors is not planning to close the reincorporation immediately.

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