Brooklyn: Apple is violating the law by packaging a measure to limit the offering of preferred shares with other matters up for a shareholder vote, Greenlight Capital said in a court filing.
David Einhorn's investment firm said in a brief filed on Friday in federal court in Manhattan that Apple's move would cause 'an actual and imminent injury' to investors. The February 27 vote should be stopped unless Apple unbundles the measures and allows each to be considered separately, Greenlight said in the filing.
Shareholders "will have been irrevocably stripped of their right to fair corporate suffrage — the very right the unbundling rules were designed to vindicate," Greenlight said in the filing, referring to United States Securities and Exchange Commission (SEC) 'unbundling' rules it alleges Apple is violating.
Preferred shares
"These harms all can be prevented by an injunction before the vote, and none can be remedied after," Greenlight said. Apple said in a filing February 13 that it isn't breaking SEC rules and that the preferred share measure isn't as restrictive as Greenlight alleges.
Einhorn, whose firm says it holds more than 1.3 million Apple shares, has argued that the California-based company should issue high-yielding preferred shares to return value to investors from a $137 billion cash hoard.
The hedge fund founder told Apple executives that their proposed preferred stock restriction could pose a 'roadblock that was not needed' to his plan, according to a February 13 filing by Apple chief financial officer Peter Oppenheimer. - Bloomberg News
Apple contends the measure that Greenlight opposes only eliminates so-called blank cheque preferred-stock provisions. Without those provisions, preferred shares could be issued as long as investors approve, according to Apple.