What Will This Apple Fight Lead To?
On Tuesday, a federal judge is scheduled to hear the arguments of David Einhorn’s Greenlight Capital in its attempt to block investor voting on an Apple (NASDAQ:AAPL) proposal while the company defends its right to go ahead with it.
According to Einhorn, a proposal in Apple’s shareholder meeting proxy is set to make it harder for the company to issue preferred stock and return more cash to its investors. Apple, in defense, has argued that the measure is designed to give more power to shareholders.
Apple said in court filings that it “strongly believes that the issuance of preferred shares, which can dramatically subordinate the rights of common shareholders, should be subject to approval by those common shareholders.”
Greenlight disagreed, and also alleged that the company unfairly combined the proposal with two other measures for the vote scheduled for February 27, thus violating U.S. Securities and Exchange Commission rules.
“Despite the federal regulations’ plain text barring this kind of bundling, Apple plans to charge ahead with its vote,” Greenlight said in its filings with a district court in Manhattan. Apple “should be enjoined from giving effect to a vote carried out in violation of the plain text of the law,” it said.