Einhorn wins ruling against Apple in cash pile fight

Fri Feb 22, 2013 5:00pm EST
 

By Nate Raymond

NEW YORK (Reuters) - A U.S. judge handed outspoken hedge fund manager David Einhorn a victory in his battle with Apple Inc on Friday, blocking the iPhone maker from moving forward with a shareholder vote on a controversial proposal to limit the company's ability to issue preferred stock.

U.S. District Judge Richard Sullivan in Manhattan granted a motion by Einhorn's Greenlight Capital for a preliminary injunction stopping the vote on that proposal.

The vote was scheduled for February 27 as part of the company's annual stockholders' meeting.

Greenlight sued Apple on February 7 as part of a broader pitch to unlock more of Apple's $137 billion in cash for shareholders. Einhorn has argued Apple should issue preferred stock with a perpetual 4 percent dividend.

The lawsuit itself challenged a measure called Proposal No. 2 that Apple put forward that would eliminate Apple's power to issue preferred shares without a shareholder vote.

At issue is Apple's "bundling" of the measure on the preferred shares with two other unrelated matters into a single proxy proposal.

Greenlight said it supported two proposed the amendments but not the one on preferred shares.

Sullivan said Greenlight and another investor who also sued Apple "are likely to succeed on the merits and face irreparable harm if the vote on Proposal No. 2 is permitted to proceed."   Continued...

 
David Einhorn, president of Greenlight Capital, speaks during the Sohn Investment Conference in New York, May 16, 2012. REUTERS/Eduardo Munoz