Nu-Med Seeks Approval to Reincorporate in Delaware
Nu-Med, an Encino-based hospital chain, reported Monday that it will ask stockholders at its annual meeting on Oct. 30 for approval to reincorporate in Delaware.
The company wouldn’t specify why it wants to become a Delaware corporation. Most of the nation’s largest companies are incorporated in the state because it offers greater flexibility in areas such as structuring boards of directors and drafting anti-takeover provisions.
Recently, many companies have reincorporated in Delaware to take advantage of a new state law that in some circumstances limits directors’ exposure to shareholder suits. The law, for example, protects directors from being sued for negligence.
Cecilia Wilkinson, a company spokeswoman, said Nu-Med should be able to acquire liability insurance more easily in Delaware. She said the reincorporation is simply a legal maneuver and no Nu-Med personnel would move to Delaware.
Nu-Med also reported that it will file a registration statement in about a month with the Securities and Exchange Commission to form a real estate investment trust, whose shares would be exchanged for Nu-Med common and preferred stock.
Nu-Med owns 13 acute-care hospitals, 11 office buildings and three psychiatric hospitals.