Apple cancels shareholder vote after judge sides with Greenlight's Einhorn
Greenlight Capital hedge fund manager David Einhorn has scored a legal victory against Apple in the lawsuit he and shareholders filed against 1 Infinite Loop earlier this month. Reuters is reporting that US District Judge Richard Sullivan has sided with Einhorn and ordered Apple to postpone voting on a contested measure during a shareholder meeting scheduled for February 27. In a statement, Greenlight called the ruling "a significant win for all Apple shareholders and for good corporate governance."
Called Proposal 2, the measure would, if approved, require a shareholder vote before the Cupertino company could issue preferred stocks. Einhorn is opposed to the measure and has instead proposed "iPrefs," a form of preferred stock and perpetual divided.
In the wake of the decision, Apple has formally removed a vote on Proposal 2 from next week's meeting agenda. The measure had been paired with two other unrelated proposals -- both of which Einhorn agrees with -- in a proxy vote. Einhorn contends that combining the items amounts to "bundling," a practice which violates Securities and Exchange Commission rules.
While Einhorn and company are obviously pleased with the court's decision, Reuters reports that other Apple shareholders, including pension fund CalPers, are not so happy. Einhorn's end goal is to see the matter of preferred stock issuance unbundled from Proposal 2, but Apple has so far given no indication that it intends to willingly cave to these demands.
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