Facebook to Pay $67.5 Million in Fees in Suit Over Shares.\u00a0Facebook Inc.\u00a0agreed to pay $67.5 million in legal fees so co-founder Mark Zuckerberg won\u2019t have to explain in court why he dropped a plan to create non-voting shares to further his charitable efforts.<\/p>\n
Lawyers for a group of Facebook investors, who sought $129 million in fees for challenging the new share class, agreed to cut their demand by about half to resolve the case, according to a\u00a0Delaware Chancery Court\u00a0filing. The settlement may be paid by the company\u2019s insurers, the filing shows.<\/p>\n
Zuckerberg was criticized for asking directors to create a class of non-voting shares so he could sell most of his Facebook stake to fund charitable works while still keeping control of the world\u2019s largest social-media company. The board approved the new stock and a majority of all the company\u2019s shareholders had backed the move before Zuckerberg decided to\u00a0drop\u00a0the effort last year.<\/p>\n
Zuckerberg was scheduled\u00a0testify\u00a0next month in Delaware about his reasons for dropping the plan to help a judge decide the value of investors\u2019 efforts in fending off the move. Vanessa Chan, a spokeswoman for Facebook, declined to comment Wednesday on the accord over the fees.<\/p>\n
Objecting investors claimed victory after Zuckerberg nixed the proposal. They said they \u201cchallenged the reclassification in this hard-fought litigation\u2019\u2019 and deserved to be rewarded for achieving \u201cthe outcome they were seeking at trial.\u2019\u2019 Stuart Grant, one of the investors\u2019 lawyers, declined to comment on the fee settlement.<\/p>\n
Earlier this year, a pension fund\u00a0sued\u00a0Facebook directors for being too accommodating to Zuckerberg\u2019s non-voting share gambit and not working diligently enough to protect other Facebook investors\u2019 interests.<\/p>\n
According to that suit, Zuckerberg, during a meeting with a special board committee considering the proposal, got real-time texts from director Marc Andreessen giving him a heads up on which of his arguments were gaining traction.<\/p>\n
\u201cThis line of argument is not helping,\u2019\u2019 Andreessen warned in one text. \u201cThe committee wants to do this. You don\u2019t need to question that.\u2019\u2019 In another, the venture capitalist noted \u201cNOW WE\u2019RE COOKING WITH GAS.\u2019\u2019<\/p>\n
Those kinds of actions by supposedly neutral directors made the committee\u2019s evaluation of the proposal \u201ca charade that was designed to appease\u2019\u2019 Zuckerberg, the fund\u2019s lawyers said in the suit against directors.<\/p>\n
The fee dispute was In re Facebook Inc. Class C Reclassification Litigation No. 12286, Delaware Chancery Court (Wilmington). The new investor case is United Food and Commercial Workers Union and Participating Employers Tri-State Pension Fund v. Zuckerberg, 2018-0671, Delaware Chancery Court (Wilmington).<\/p>\n","protected":false},"excerpt":{"rendered":"
Facebook to Pay $67.5 Million in Fees in Suit Over Shares.\u00a0Facebook Inc.\u00a0agreed to pay $67.5 million in legal fees so co-founder Mark Zuckerberg won\u2019t have to explain in court why he dropped a plan to create non-voting shares to further his charitable efforts. Lawyers for a group of Facebook investors, who sought $129 million in […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-77","post","type-post","status-publish","format-standard","hentry","category-tech-news"],"yoast_head":"\n