American billionaire Mark Zuckerberg faces shareholder lawsuit over Meta’s proposed stock restructuring

American billionaire Mark Zuckerberg and other Meta Platforms directors have been sued by a pension fund seeking to block a share restructuring that would allow the Facebook founder to sell billions of dollars in stock while maintaining control of the social media company.

The lawsuit was filed on October 27 in Delaware’s Court of Chancery by the Steamfitters Local 449 Pension Fund. It challenges a restructuring approved by Meta’s board on October 19 and disclosed in a regulatory filing two days later. The complaint seeks to prevent the company from implementing the transactions.

At the centre of the dispute is Meta’s plan to introduce publicly traded Class C shares that carry no voting rights. Under the proposal, existing shareholders would receive one Class C share for every Class A or Class B share they hold, with the new shares expected to begin trading in January 2027.

Zuckerberg holds most of his Meta stake through Class B shares, which carry 10 votes each, compared with one vote for publicly traded Class A shares. Selling his Class B shares typically reduces his voting power because they convert into Class A shares.

The new structure would allow him to sell some of his non-voting shares without substantially weakening his control over the company. According to Bloomberg Law, the shareholder complaint estimates that he could initially sell 20% of the new shares allocated to him, potentially generating nearly $24 billion at prevailing market prices.

The plaintiffs argue that the restructuring disproportionately benefits Zuckerberg by enabling him to monetise his investment while preserving his influence over Meta. The complaint also alleges that he pressured the company’s directors to approve terms favourable to him. Those assertions are allegations in the lawsuit and have not been established by a court.

The dispute comes as Meta expands its artificial intelligence operations and faces a potential tax change in California. The company has forecast capital expenditure of $135 billion to $145 billion in 2026 to fund investments in data centres, computing infrastructure and other AI-related projects. Meta has said the new shares would provide additional flexibility to raise capital, finance acquisitions and compensate employees without substantially diluting existing voting power.

The proposed California wealth tax is another factor in the dispute. The complaint alleges that Zuckerberg’s restructuring would help him raise cash to meet a potential tax liability while retaining control of Meta. The proposal would impose a one-time levy on the wealth of qualifying billionaires if approved by voters.

Meta defended the restructuring when it announced the plan, citing the company’s financing requirements and the importance of maintaining its founder-led structure. The company had not immediately responded to a request for comment on the lawsuit, Bloomberg Law reported.

The case introduces a legal challenge to a transaction designed to give Meta greater financing flexibility while protecting Zuckerberg’s voting control. Its outcome could determine whether the company can proceed with the proposed share structure as planned.