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Wallace Funds Lose Voting Power

By Published on .

NEW YORK (AdAge.com) -- Reader's Digest Association completed a recapitalization plan that will replace its two-tier stock ownership and reduce the power of the Lila and Dewitt Wallace Reader's Digest Funds.

A special shareholders' meeting

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today approved the plan, which replaces both non-voting Class A shares and Class B shares with voting rights with a single class of shares with voting rights.

The new stock will be traded on the New York Stock Exchange under the ticker symbol RDA.

The plan will reduce the voting power of the Wallace funds from 50% to 13% while giving Class A shareholders 79% of the votes.

The initial plan, announced in April, was challenged in court by several shareholders who filed suits claiming the plan unfairly benefitted the funds and company directors. The plan was reworked in October to reduce the payments to the funds in order to settle the suits.

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