Friday, February 15, 2013, 05:45 pm PT (08:45 pm ET)
Greenlight's David Einhorn reasserts case against Apple ahead of hearingDavid Einhorn, whose Greenlight Capital is suing Apple to block a proposal that would hinder the company's power to issue preferred stock, filed a response to the U.S. District Court in Manhattan on Friday, saying that the company's "pro-shareholder" amendment is anything but.
The restatement of Einhorn's original argument comes after Apple filed its own response on Wednesday, which claimed the lawsuit is holding shareholders "hostage" in an attempt to force the company into making a decision that would only benefit the hedge fund chief.
Einhorn disagrees with Apple's view and, as noted by Reuters, offered some strong words in support of his lawsuit.
"First, I believe it it is up to the shareholders, not Apple, to determine whether a proposed amendment is 'pro-shareholder' and to do so by voting on the amendment separate from other items," Einhorn said in Friday's filing. "In this suit, the Greenlight Entities are seeking vindication of the rights of all Apple shareholders to vote their views on that issue, separate from other matters that I support."
Earlier in the response, Einhorn noted that one of his responsibilities as the portfolio manager of the Greenlight Entities is to conduct extensive research and analysis of Apple, which is one of his major investments.
The lawsuit takes issue with Apple's so-called "Prop 2" proxy proposal which will be voted on at the company's upcoming shareholders' meeting scheduled for the end of February. If passed, Prop 2 would remove the power to issue preferred stock from Apple's board and put it in the hands of shareholders.
Greenlight's Einhorn is seeking for the issuance of perpetual preferred shares, dubbed "Greenlight Opportunistic Use of Preferreds" or "GO-UPs," which would in theory allow Apple to mete out some of its $137 billion cash hoard with shares that pay out higher than normal dividends. Apple claimed on Wednesday that the GO-UPs only serve Greenlight's financial interests and "do not serve the public interest."
The court is set to hear the case on Feb. 19, just over one week before the scheduled Feb. 27 Apple shareholder meeting.
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