BOSTON, June 17, 2013 /PRNewswire/ -- Block & Leviton LLP, one of the court appointed co-lead counsel in the lawsuit pending in Delaware Chancery Court, In re Google Class C Shareholder Litigation, (Del. Ch. C.A. No. 7469-C), is pleased to report the settlement of the action, reached two days prior to the start of trial.
The action sought to enjoin Google Inc. from issuing a stock dividend whereby each of its current stockholders would receive one share of Class A voting stock and one share of nonvoting Class C stock for each previously held share. Although Google, under Delaware law is permitted to issue nonvoting stock, Plaintiffs here claimed that the plan, as enacted, was unfair to Google's public shareholders.
Under the terms of the settlement, if the nonvoting shares trade at a discount, measured over a year, Google is obligated to pay holders of the nonvoting shares a percentage of the overall trading differential, up to 5% of that trading differential. In addition, when Larry Page's and Sergey Brin's combined voting control falls below 15%, the Class C shares will convert to Class A shares – thereby regaining voting rights – unless the Board at the time determines that it is in Google's best interests to maintain the class of nonvoting stock. Finally, the settlement agreement makes it tougher for Mr. Page and Mr. Brin to sell or swap their nonvoting stock, further ensuring their economic interests are aligned with all Google shareholders.
"We believe this settlement addresses the risks facing Google's public shareholders that the nonvoting stock will not be as valuable as Google's voting stock," said Jeffrey C. Block, one of the lead trial counsel. "Mr. Page and Mr. Brin have, and will continue to have, voting control over Google and no lawsuit can change that," Block said, "the lawsuit was designed to make the nonvoting stock issuance fairer to Google's Class A shareholders."
The settlement must be approved by the Court of Chancery after notice to all Google shareholders.
Contact Information: Jeffrey C. Block (617) 398-5600
SOURCE Block & Leviton LLP