Ahead of hearing, Einhorn reiterates case against Apple

NEW YORK Sat Feb 16, 2013 5:32am IST

The Apple logo is pictured at the company's flagship retail store in San Francisco, California January 23, 2013. week. REUTERS/Robert Galbraith

The Apple logo is pictured at the company's flagship retail store in San Francisco, California January 23, 2013. week.

Credit: Reuters/Robert Galbraith

Related Topics

Stocks

   
Priyanka Gandhi Vadra, daughter of Congress party chief Sonia Gandhi, adjusts her flower garlands as she campaigns for her mother during an election meeting at Rae Bareli in Uttar Pradesh April 22, 2014. REUTERS/Pawan Kumar

Election 2014

More than 814 million people — a number larger than the population of Europe — are eligible to vote in the world’s biggest democratic exercise.  Full Coverage 

NEW YORK (Reuters) - David Einhorn reiterated his arguments Friday that a judge should block a shareholder vote on Apple Inc's (AAPL.O) proposal to eliminate its ability to issue preferred shares without investor approval, days before a court hearing.

In court filings in U.S. District Court in Manhattan, Einhorn's Greenlight Capital attempted to rebut Apple's arguments that the company's proposal was "pro-shareholder."

"Apple should not be allowed to substitute its judgment for its shareholders' judgment, and should be enjoined" from letting the vote proceed, Greenlight said in a motion.

A hearing on Einhorn's motion for an injunction against the February 27 vote on the proxy proposal is set for Tuesday. A spokesman for Apple declined comment.

Greenlight sued Apple last week as part of Einhorn's larger effort to have the iPhone maker share more of its $137 billion in cash with investors.

As part of that goal, Einhorn has pushed for Apple to issue to its shareholders perpetual preferred stock with a 4 percent dividend.

Among the Apple proxy proposals up for a vote February 27 is Proposal No. 2, which would remove the company's current system of issuing preferred stock at its discretion without a shareholder vote.

Greenlight's lawsuit contends Apple violated U.S. Securities and Exchange rules by "bundling" three separate amendments to its charter into Proposal No. 2. While Greenlight supports two of the amendments, it does not back the one related to preferred stock.

Apple in a Wednesday filing argued the proposal was not bundled and that it had not forced shareholders into an unfair choice. It also noted Proposal No. 2 was supported by proxy advisory services Institutional Shareholder Services and Glass, Lewis & Co.

But Einhorn argued on Friday that ISS and Glass Lewis's support is premised on the belief that eliminating so-called "blank check" preferred stock powers enables a company to defend itself against a takeover.

"In my view, Apple is not a realistic take-over candidate because of, among other things, its enormous market capitalization," Einhorn wrote.

At Tuesday's hearing, U.S. District Judge Richard Sullivan will also hear a separate challenge by an Apple investor from Pennsylvania to block not just the Proposal No. 2 vote, but also an advisory "say-on-pay" vote on executives compensation.

The investor, Brian Gralnick, contends Apple has not disclose enough details about how it made its decisions in awarding restricted stock units to certain executives.

Apple responded that its disclosures were adequate and appropriate.

The case is Greenlight Capital LP, et al., v. Apple Inc., U.S. District Court, Southern District of New York, 13-900. (Reporting By Nate Raymond; Editing by Leslie Gevirtz)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Facebook Earnings

Facebook Earnings

Facebook Q1 revenue grows 72 percent on rising mobile ads.  Full Article 

Huawei Shrugs

Huawei Shrugs

China's Huawei says reports of NSA spying won't impact growth  Full Article 

Betting on Content

Betting on Content

AOL, Microsoft lure advertisers with TV-style shows.  Full Article 

Restructuring Plans

Restructuring Plans

Zynga's Pincus withdraws from operations amid turnaround.  Full Article 

Security Threat

Security Threat

FBI warns healthcare sector vulnerable to cyber attacks.  Full Article 

Online Streaming

Online Streaming

Amazon grabs rights to stream older HBO shows.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage