The mega-merger of medtech titans Medtronic (NYSE:MDT) and Covidien (NYSE:COV) has some of Medtronic’s shareholders angry that they are being stuck with a tax penalty because of the structure of the $43 billion merger.

MassDevice.com reports that some long-time backers of Medtronic have filed a lawsuit to block the merger and others appeared at the company’s latest annual conference to say they shouldn’t be penalized by the merger.

All Medtronic shareholders, including executives and board members, will face a capital gains tax when the Covidien deal closes, reports MassDevice.com. Former CEO Bill George told the audience at this week’s meeting that he plans to donate some of his shares to charities and family trusts in order to offset part of the $1.5 million he estimated he owes on the deal.

Medtronic’s acquisitions have never been a taxable event in the past, and the structure of the new deal has already spurred at least one lawsuit from shareholders who claim the deal leaves them in the cold.

“Medtronic stockholders will be forced to pay taxes on any gains in Medtronic stock,” according to the complaint, which seeks class action status. “But because the sale does not generate cash proceeds that would allow stockholders to pay the taxes, Medtronic stockholders who have held the stock for over a year could see federal tax rates of 15 to 30 percent on the gain.”

Medtronic has justified the deal’s structure as necessary for protecting Covidien’s existing assets from high U.S. tax rates, allowing the company to reinvest in new products. Shareholders responded that they’d have to sell their shares in order to make up for the loss on taxes.

“This is the least shareholder-friendly proposal that I have ever seen,” one shareholder said.