United States business services and technology giant Xerox is facing a lawsuit from one of its largest individual shareholders in an attempt to block its spin-off plans.
Darwin Deason, who owns a 6.1% stake, claims that the split violates the agreement he signed with Xerox before it bought his Affiliated Computer Services Inc (ACS) in 2010.
Reports say Deason is seeking preferential shares in the company’s BPO business, but his concern is that the spin-off would instead leave him with shares in the document service business, as stated in the lawsuit filed with the U.S. District Court in Dallas.
Xerox, based in Norwalk, Connecticut, has quickly rebutted his claim, calling the lawsuit “meritless” and vowing to have it dismissed.
ACS, reputed to be one of the first companies to outsource office work to places outside of the United States, was merged with Xerox in 2010 amidst bickering by other shareholders over the size of the premium Deason received in the deal.
ACS served as a springboard for Xerox to grow into a strong BPO player in the space of few months. Last year, the BPO unit reported a staggering $7 billion in earnings.
According to The Wall Street Journal, the company’s biggest institutional investor is Carl Icahn’s hedge fund, which held a nearly 10% stake as of June 30 and has supported the plan to break up the company.