AT&T faces a law suit after three pension funds filed a writ to stop the US telecoms giant from altering its charter, in order to halt what they call a threat to shareholders right to a meaningful say in the company's future.
The writ filed in the New York Supreme Court by the Amalgamated Bank's LongView retirement plan and the pension funds of the AFL-CIO and the Communications Workers of America unions, alleges that AT&T has adopted an illegal process for amending its corporate charter. The pension funds claim that AT&T acted illegally in altering its corporate charter to permit only a majority, rather than two thirds, of shareholder votes to authorise a major restructuring.
The funds also contend that as AT&T has such a diffuse shareholder base, allowing a simple majority to approve major transactions would effectively give management a green light to restructure the company however it sees fit.
AT&T claims that the existing two thirds voting requirement can be eliminated by a simple majority shareholder vote. In its preliminary proxy statement filed March 14 with the Securities and Exchange Commission, AT&T proposed to put such an amendment to shareholders at its May 23 annual meeting.
Collectively, the plaintiffs own $30m (£21m) of AT&T voting stock. The funds claim that AT&T's changes to the voting process is merely a ploy to get around the needed two thirds shareholder vote for the contemplated and much criticised restructuring, as management can not win more than simple majority support for its proposed breakup plan.”
By Geoffrey Ho
Professional Pensions is looking to update its list of pensions master trusts in the UK ahead of authorisation. Can you help?
RPMI Railpen is in the next step in the journey towards achieving cost disclosure. Victoria Bell tells Stephanie Baxter about taking part in the Cost Transparency Initiative's pilot phase
Interserve's numerous defined benefit (DB) schemes have retained a sponsor link after the company entered into administration and was sold.
Chris Hannon has been named chairman of the Railways Pensions Trustee Company after a unanimous vote of approval from its board last week.