eXp looks to Texas after ruling in sex assault case 

eXp World Holdings is seeking shareholder approval to move its incorporation from Delaware to Texas, a proposal that comes six weeks after a Delaware judge allowed a lawsuit to proceed over allegations that company leadership concealed sexual assaults by top agents.

Founder and CEO Glenn Sanford disclosed the proposed move in a Feb. 25 Securities and Exchange Commission filing, writing that Texas offers "a governance environment that is clearer, more predictable, and better suited to a company of our size and complexity." The proposed shift now heads to investors for a vote at the company's annual stockholder meeting, which takes place on April 24.

The filing, first reported by Bloomberg Law, does not explicitly tie the relocation to the recent court ruling. But the timing follows a Jan. 16 decision by Delaware Chancery Court Chancellor Kathaleen St. J. McCormick, which allowed claims against Sanford and other board members to proceed.

eXp says Texas move would be in company's 'best interests'

In a statement sent to Real Estate News, eXp said its board "believes reincorporating to Texas is in the best interests of the Company and its stockholders, providing a governance framework suited to a company of eXp's size and complexity; a decision arrived at after more than a year of significant deliberation and review."

"The reincorporation is not expected to result in any change to our business, management, operations, assets, or liabilities. Extensive details about the proposal are described in our proxy statement filed with the SEC," the statement added.

Shareholder-driven 'rape culture' case moves forward

The lawsuit, filed in 2024 by two pension funds, alleges Sanford helped conceal what plaintiffs described as a pervasive "rape culture" at the company.

Former eXp agents Michael Bjorkman and David Golden "allegedly drugged and raped eXp real estate agents at company-sponsored events" — and a "dozen other eXp agents allegedly participated," according to McCormick's Jan. 16 opinion.

Efforts made by survivors and an executive-level whistleblower to get the company to address this alleged culture — beyond launching an internal investigation and firing Bjorkman and Golden — were unsuccessful until 2023, when anti-trafficking claims were filed against the company, the opinion says.

Sanford and the other named defendants "are not alleged to have harassed, drugged, assaulted, or raped anyone," the opinion noted, but they allegedly "harmed the company by allowing their agents to be harassed, drugged, assaulted, and raped at company events" and "failed to respond in good faith to red flags."

The plaintiffs have also claimed that Sanford had a financial incentive to retain Bjorkman and Golden because of eXp's downline structure, which "incentivizes sponsors to retain top agents in their downline."

Why some companies are making 'DExit' plans

Delaware remains the incorporation home to about two-thirds of Fortune 500 companies because it offers a specialized business court — the Court of Chancery — with deep expertise in corporate law and decades of predictable legal precedent.

But the state's incorporation practices have faced criticism from some executives and others concerned about shareholder litigation and scrutiny of corporate governance.

Texas has recently established a specialized business court and has actively promoted itself as an alternative to Delaware for corporate charters. Nevada is also pursuing companies seeking what they view as more management-friendly legal environments.

Elon Musk's SpaceX has been among the major companies making or publicly exploring moving incorporation out of Delaware.

Editor's note: This story has been updated to include a statement from eXp.