Enservco leaders push to move incorporation from Delaware to Nevada

LONGMONT — In search of cost savings and enhanced legal protections, the board of directors at Enservco Corp. (NYSE American: ENSV), a provider of specialized well-site services to the domestic onshore oil and gas industries, is urging its shareholders to approve a measure that would change the company’s state of incorporation from Delaware to Nevada. 

The company failed to win support for the proposal last month during its annual shareholder meeting, which was adjourned so leaders could continue to drum up support. 

“Management and the board believe reincorporation is in the best interests of all stockholders, and we are encouraging our investors to vote their shares in favor of the proposal no matter how many shares they own,” Enservco chief financial officer Marjorie Hargrave said in a prepared statement. 

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Reincorporating in Nevada will eliminate the company’s obligation to pay the annual Delaware franchise tax, which amounted to $200,000 last year, according to a U.S. Securities and Exchange Commission disclosure.

“In addition, the reincorporation may help us attract and retain qualified management by reducing the risk of frivolous lawsuits being filed against the company and its directors and officers,” the SEC filing said. “We believe that for the reasons described below, in general, Nevada law provides greater protection from such litigation to our directors, officers and the company than Delaware law. The increasing frequency of claims and litigation with little or no merit directed toward directors and officers has greatly expanded the risks facing directors and officers in general of public companies in exercising their duties.”

The disclosure claims the reincorporation proposal is not “in response to any present attempt known to our board to acquire control of the company or obtain representation on our board. Nevertheless, certain effects of the proposed reincorporation may be considered to have anti-takeover implications by virtue of being subject to Nevada law.”

The proposal requires approval by a majority of Enservco’s outstanding shareholders, who may vote on the matter by phone or online. 

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