May 1, 2012 (PLANSPONSOR.com) – Google, Inc. was sued by a Brockton, Massachusetts, pension fund that claims the company’s planned stock split would unfairly create nonvoting shares.
The Brockton Retirement Board contends that officials of Google failed to act in the best interests of shareholders in creating a new class of stock, according to Bloomberg.
In the complaint filed in a Delaware Chancery Court the Fund stated, “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 nonvoting class of Google stock in order to preserve their voting power into perpetuity.”
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, nonvoting Class C stock in what amounts to a 2-for-1 stock split, according to the complaint.
The Brockton fund asked a judge to block the new stock plan and award unspecified compensatory damages, reports Bloomberg.