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Bring Business to Texas and Fairness in Disclosure Act

Texas’ proposed “Bring Business to Texas and Fairness in Disclosure Act” would require certain investors and proxy advisory firms to comply with new disclosure requirements when dealing with publicly traded Texas-based companies.

The Texas legislature has proposed a new bill entitled the “Bring Business to Texas and Fairness in Disclosure Act” (the “Texas Act”) that would require certain investors in publicly traded companies headquartered in Texas and proxy advisory firms making recommendations with respect to publicly traded Texas-based companies to comply with a set of austere disclosure requirements. The unduly burdensome, excessive and inequitable scope of the proposed disclosure requirements is like nothing we have ever seen proposed by any state. If the Texas Act were adopted, it could have a chilling effect on shareholder activism and proxy advisory work with respect to public companies that have a specified presence in Texas, which, in turn, would help entrench management and the boards of underperforming Texas-based companies. For more information, please read the Client Alert.

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