Reddit Hit With Class Action Challenging Board Removal Bylaw

Reddit Inc. adopted charter provisions that unlawfully restrict investors from removing board members, then responded to a legal demand by taking an “absurd” position likely attributable to AI, according to a lawsuit filed Tuesday.

A retail shareholder sued Reddit in Delaware’s Chancery Court, targeting a section of its corporate certificate that hinges director removal on consent from the social media giant’s principal investor, Advance Magazine Publishers Inc., an affiliate of the Newhouse publishing dynasty. The clause plainly violates a state law giving investors the right to remove board members by majority vote, the suit says.

“There is no allowance for ...