Google Sued by Pension Fund Over Proposed Stock Split
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).
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