Mark Zuckerberg is set to take the public stand for the second time in his life later this month, being scheduled to testify at the Delaware Chancery court on September 26 and thus officially mark the start of a lawsuit launched against his Facebook stock restructuring plan which envisions issuing non-voting shares to investors in the Menlo Park, California-based social media giant. Facebook co-founder and Chief Executive Officer has been planning to create Class C shares for some time now, with the idea itself being officially introducing with the publication of the firm’s consolidated financial report for the first quarter of 2016. The plan was soon met with a class action lawsuit filed in April of last year, with numerous plaintiffs seeking to prevent the stock restructuring initiative which would allow Mr. Zuckerberg to maintain control of the company even as he continues selling his official share in it, with Class C stock coming with all of the economic rights as their counterparts but with no voting power. The plan is essentially seeking to transition the company’s stock structure to the one that’s already employed by Google.
The plaintiffs allege that Facebook board member Marc Andreessen was coaching Mr. Zuckerberg on how to present the plan in a way that would win the board’s approval, suggesting misleading practices led to the firm’s decision to restructure its shares. The lawsuit also accuses the multi-billionaire of intentionally devaluing shares and segregating his economic interests with those held by the majority of Facebook’s voting rights. Mr. Zuckerberg is reportedly seeking to adopt the new stock structure in an effort to maintain control of the social media giant while simultaneously continuing to fund his philanthropic endeavors spearheaded by the Chan Zuckerberg Initiative which he co-founded with his wife Priscilla Chan in late 2015.
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Mr. Zuckerber’s upcoming testimony will follow his public courtroom debut which came in early 2017 when the 33-year-old was called to take the stand in regards to a major patent dispute between Facebook-owned Oculus and entertainment company ZeniMax Media who claimed that its former employee John Carmack stole a number of virtual reality (VR) trade secrets while working at its subsidiary id Software, then used that protected intellectual property to advance a number of Oculus-made creations including the Rift headset and related services. While Oculus wasn’t found guilty of trade secret theft, it was still ordered to pay $500 million in damages, with the case thus ending in a major defeat for Facebook and a setback to its VR ambitions.