DOW JONES NEWSWIRES HOUSTON - Nabors Industries Inc. (NBR) shareholders approved a proposal on Friday to reorganise the company, moving its incorporation to Bermuda from Delaware.

The vote was 65% in favour of the move, despite opposition that included a shareholder's class-action lawsuit.

The oil drilling company said the move to Bermuda would give it greater operational flexibility and greater access to capital markets, as well as helping its tax position.

Opponents, including the AFL-CIO, said the move would reduce shareholder rights, including the right to sue officers and directors on behalf of the company.

At the meeting, officials representing the AFL-CIO and the Central Laborers Pension Fund objected to the proposal to reincorporate in Bermuda. Each of the labour organisations owns shares in Nabors.

Toby Sheppard Bloch, representing the AFL-CIO, said the organisation objects to Nabors and other companies moving from the US to Bermuda .

The AFL-CIO did an analysis of company proposals to move to Bermuda and Nabors was the only company that didn't identify possible negative consequences for shareholders, Bloch said.

Incorporation in Bermuda gives shareholders fewer rights to sue a company's officers and directors, he said. The recent accusations of improprieties at Global Crossing Ltd. (GBX) and at Tyco International Inc. (TYC) have shown the importance of such rights, he said.

While shareholders may trust current officers and directors of Nabors, Bloch told the meeting, they can't determine the motives of future officers and directors.

Linda Priscilla, representing the Central Laborers Pension Fund, said her organisation asked the company more than a month ago to disclose possible negative consequences of Bermuda move. She asked Nabors Chairman Eugene Isenberg why the company waited until Thursday to respond at a federal court hearing on a temporary restraining order to halt the Nabors shareholder vote.

Priscilla also asked how much it would cost Nabors to reincorporate in Bermuda .

Isenberg declined to answer either question.

After the shareholder meeting, Bloch told Dow Jones other possible consequences of the move.

Bermuda doesn't have to recognise decisions in lawsuits filed by shareholders in US courts, he said. In Bermuda, courts can throw out any lawsuit that is contrary to the public policy of Bermuda .

The labour organisations failed to find any attorneys in Bermuda who represent shareholders in lawsuits against Bermuda-based companies, Bloch said. All the attorneys represent Bermuda-based companies, he added.

The labour organisations said they will ask Nabors to allow another vote on the reincorporation in Bermuda .

Company officials couldn't be reached to comment on the possibility of another vote on the proposal.

A federal judge in Houston made it clear he will not delay Nabors Industries Inc.'s (NBR) Bermuda reincorporation, but has apparently left the door open to future court action.

Lawyers involved with the case said they were informed by US District Court Judge Lee Rosenthal that she will deny a temporary restraining order sought by shareholders who filed a class-action suit trying to block the Bermuda move.

An opinion was expected to be issued later on Friday.

Damon Silvers, associate counsel at the AFL-CIO, which intervened on the plaintiffs side in the case, said that Rosenthal told attorneys that she was still prepared to schedule a preliminary injunction hearing, which would be the next stage in the proceedings.

That indication "is consistent with our understanding that the merits of this matter have not been resolved," he said, adding that even if the company closes on the reincorporation, "it is a reversible act." A lawyer representing the plaintiffs declined to discuss the judge's decision until a ruling is formally handed down.

Earlier on Friday, Nabors shareholders approved a proposal to reorganise the company, moving its incorporation to Bermuda from Delaware with 65% of outstanding shares cast in favour of the move.

The class-action lawsuit was filed on behalf of shareholders last month, alleging that Nabors' proxy statement contained misleading statements and omissions including about the risks that the reorganisation won't result in favourable tax treatment and that the company failed to make adequate disclosures regarding the benefits of the reorganisation in comparison to its burdens, among other things.

A growing number of companies are moving their addresses to island tax havens where they can avoid paying taxes on foreign income.

Federal lawmakers, however, have introduced legislation to crack down on the tax benefits. Generally, companies' operations and headquarters stay in the US.

Lee Squitieri, a lawyer for the named plaintiff in the lawsuit against Nabors, said that he hadn't made a decision about how to proceed on behalf of his client. Squitieri said he just received the judge's opinion rejecting the application for a temporary restraining order, but hadn't yet reviewed the ruling.

Among the options he's considering is an emergency appeal for forto the 5th Circuit Court of Appeals; filing for a preliminary injunction if Nabors isn't closing the reincorporation immediately; and continuing the case in hopes of winning damages for fro his client, Steve Rosenberg. Rosenberg owns a couple of hundred shares, he said. Squitieri said that damages could be based on the capital gains taxes his client and other shareholders will be required to pay when the so-called inversion takes place. Such reincorporations are treated as stock sales for income tax purposes.

Lee Squitieri, a lawyer for the named plaintiff in the lawsuit against Nabors, said that he hadn't made a decision about how to proceed on behalf of his client.

Squitieri said he just received the judge's opinion rejecting the application for a temporary restraining order, but hadn't yet reviewed the ruling.

Among the options he's considering is an emergency appeal to the 5th Circuit Court of Appeals; filing for a preliminary injunction if Nabors isn't closing the reincorporation immediately; and continuing the case in hopes of winning damages for his client, Steve Rosenberg. Rosenberg owns a couple of hundred shares, he said.

Squitieri said that damages could be based on the capital gains taxes his client and other shareholders will be required to pay when the so-called inversion takes place.