Google Inc. (GOOG), the world’s largest Web-search provider, was sued by a Massachusetts city’s pension fund claiming the company’s planned stock split would unfairly create nonvoting shares.
The Brockton Retirement Board contends that officials of Mountain View, California-based Google failed to act in the best interests of shareholders in creating a new class of stock.
“The reclassification effort is a thinly veiled attempt to entrench” co-founders Larry Page and Sergey Brin “as dominant shareholders of Google by creating a non-voting class of Google stock in order to preserve their voting power into perpetuity,” the Brockton fund said in a Delaware Chancery Court complaint made public today in Wilmington.
Google now has Class A common shares, which have one vote each, and Class B shares, mostly held by the founders. Under the reclassification, all shareholders will receive a dividend of new, non-voting Class C stock in what amounts to a 2-for-1 stock split, according to the complaint.
Google officials didn’t immediately return voice and e-mail messages seeking comment on the lawsuit.
The Brockton fund asked a judge to block the new stock plan and award unspecified compensatory damages.
The case is Brockton Retirement Board v. Page, CA7469, Delaware Chancery Court (Wilmington).
To contact the reporter on this story: Phil Milford in Wilmington, Delaware at firstname.lastname@example.org
To contact the editor responsible for this story: Michael Hytha at email@example.com