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Shareholder sues Facebook over proposed new class C stock issuance

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Shareholder sues Facebook over proposed new class C stock issuance

is facing aproposed class-action lawsuit over its plan to issue new class C stock, which would keepfounder and CEO Mark Zuckerberg in control of the company, Reuters reportedApril 29.

Theshareholder who filed the lawsuit in the Delaware Court of Chancery claims thatFacebook's plan to amend its stock structure is unfair to shareholders and servesonly to benefit Zuckerberg, according to the report. The shareholder comparedthe issuance of the class C stock issuance to giving Zuckerberg "billionsof dollars in equity" for free.

Thenews outlet reported that the shareholder also accuses the Facebook boardcommittee that approved the share deal of not doing its best to make sure thatshareholders get something of meaningful value in exchange for keepingZuckerberg in control of the company.

Zuckerbergpreviously said that creating the new class of nonvoting capital stock wouldhelp with his plan to give money for philanthropic work. Zuckerberg and hiswife, Priscilla Chan, plan to donate 99% of their Facebook shares to advance humanpotential and equality.