Mikey Campbell
A U.S. District Court judge on Monday bumped up the schedule of Apple's pending case with Greenlight Capital, agreeing that the issue would be resolved as soon as possible given the affect an outcome could have on the company's upcoming shareholder meeting.
New York District Court Judge Richard Sullivan accelerated the suit's schedule by a number of days at the behest of Apple, which is being sued by Greenlight Capital in a bid to have the company mete out a portion its vast $137 billion cash hoard with investors. According to Apple, the request had the support of Greenlight's legal counsel, reports Reuters.
Behind the suit is Greenlight's David Einhorn, one of Apple's most prominent shareholders, who is suing to block a proxy proposal that could see the issuance of preferred stock eliminated from the company's charter.
In Apple's so-called "Proposal 2," the iPhone maker argues that a higher level of governance can be achieved by stripping the board's ability to issue preferred stock, instead leaving the matter to the purview of shareholders.
Einhorn countered, saying that Apple should return more of its $137 billion in cash to investors in the form of perpetual preferred shares that carry attractive dividends. In the suit, he is taking Apple to task over how the proposal is bundled together with two others in the company's proxy statement, which is headed for debate at the annual shareholder meeting on Feb. 27.
For its part, Apple said it is holding "active discussions" on what to do with the cash hoard and denies that the passage of Proposal 2 would hinder the issuance of preferred stock.
Apple is scheduled to respond in the Greenlight suit by Wednesday, with Greenlight slated to file subsequent documents by Friday. Both parties have been called to appear in front of Judge Sullivan for oral arguments on Feb. 19.
Andrew Orr
Malcolm Owen
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13 Comments
Einhorn is going to lead Apple to its downfall. He needs to be given the shareholder death penalty.
Why he might have a point about the mixing of issues, the bit about the preferred shares is totally self serving. The average shareholder is unlikely to ever have any but he would. And it would gain him more money.
[I]Behind the suit is Greenlight's David Einhorn, one of Apple's most prominent shareholders, who is suing to block a proxy proposal that could see the issuance of preferred stock eliminated from the company's charter.[/I] Most prominent shareholder? What makes a journalist write this? I despise people that make money of the misfortune of others. Like this David Einhorn. He's contributing to many charity organisations, but comes across as Bill Gates v2.
Some reading this reading revealed that Greenlight has had some of its short position bets explode this quarter. Not doubting the 'sincerity' underlying this guys lawsuit, but could it just be a desperation move trying to offset some large losses in other holdings? ... naw, that would never happen ...
Einhorn can't attack the BOD openly so he is asking for a legal ruling ?
Still an attack no matter how its dressed up.
Cook, Oppenheimer and co have to play the game so that this type of situation can't arise in the future.
This issue should be decided by a shareholder vote not in a court - Einhorn/Greenlight should be sued for wasting everybodies time.
It would be a sad day if a legal ruling dished up millions to the likes of Einhorn while real long term Apple investors ended up with less.