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David Einhorn’s Greenlight Capital fund has sued Apple (NASDAQ:AAPL) in an attempt to block the company from adopting a measure that would enable it to eliminate preferred stock. Einhorn is also hoping to start an investor revolt against the iPhone maker, saying the company needed to be more active in offering its shareholders more value for their investments.
Greenlight holds more than 1.3 million Apple shares.
Apple is set to announce a proposal at its February 27 shareholder meeting that would remove the company’s ability from its charter to issue “black check” preferred stock. According to Einhorn, such a proposal does not conform to regulatory rules and urged Apple shareholders to vote against it during the meeting.
Greenlight has asked a federal court in Manhattan to stop the company from certifying votes cast on the proposal. According to the fund’s filing, the company deliberately combined this measure with two other proposals, forcing shareholders to vote to accept or reject all three together. Such a measure violated the U.S. Securities and Exchange Commission’s “unbundling rules,” Einhorn said.
In addition, the fund wrote in a filing with the SEC that it was “dissatisfied with Apple’s capital allocation strategy.”
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