/// Judge Grants David Einhorn’s Motion Against Apple
David Einhorn’s Greenlight Capital has won a court order preventing Apple from holding a proxy vote on a proposal that would stop the company from being allowed to issue preferred stock. Einhorn had sued Apple in a federal court in Manhattan arguing that its proxy statement violated SEC rules that allow shareholders to vote on “each matter” in the proposals. He has feuding with Apple over a proposal in the proxy sent to shareholders he says would prevent Apple from issuing perpetual preferred shares to Apple shareholders. He says such preferred shares would be a good way mechanism through which Apple might distribute more cash to its shareholders. Apple had $131 billion in combined cash, short-term and long-term investments on its balance sheet as of the close of its most recent quarter. Apple CEO Tim Cook has dismissed Einhorn’s complaints as bizarre. At the same time, Apple has in company statements echoed by Cook sounded willing to consider the notion of preferred shares. At a Goldman Sachs conference last week, Cook called the idea “creative.” Einhorn has been campaigning for Apple create preferred shares, and argued that a proposal on its proxy statement, specifically proposal 2, would eliminate that possibility from the corporate charter. Apple has argued that the proposal wouldn’t specifically eliminate preferred shares from being issued. Cook said last week that the proposal doesn’t eliminate preferred, but it does eliminated what he called “blank check preferred,” shares from the charter. “What that means is not that Apple could not issue or release preferred shares,” he said at the Goldman conference last week. “It just says that if Apple decided to do it, we’d need to go to our common shareholders to get their approval.”
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Judge Grants David Einhorn’s Motion Against Apple
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