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David Einhorn drops his lawsuit against Apple
Greenlight Capital hedge fund manager David Einhorn has decided to end what Apple CEO Tim Cook has referred to as a "silly sideshow" by dropping the lawsuit he'd brought against 1 Infinite Loop in early February. Filed in conjunction with other Apple shareholders, the lawsuit sought to force Apple to share more of its cash with investors and kill a vote by shareholders involving preferred shares. Einhorn and company had been awarded a victory by a federal judge last week who intervened and forced Apple to postpone the vote in question. Seemingly content with the fact that the vote had been blocked by the court, Einhorn and Greenlight have dropped the suit entirely, telling AllThingsD, "Apple removed the bundled proposal from the shareholder meeting, therefore resolving the issue." One legal matter for Apple down, countless others to go.
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. [Via AppleInsider]
Judge believes Greenlight Capital has a strong case against Apple
Earlier this month, David Einhorn of hedge fund Greenlight Capital and Apple shareholders brought a lawsuit against Apple seeking to force the company to share more of its massive cash reserves with shareholders, and claiming that it had violated SEC rules in a proposed amendent to its corporate charter. Yesterday in New York, US District Judge Richard Sullivan, who's hearing the case, said that the "likelihood of success is in favor for Greenlight on the merits," according to a report by Fortune. Einhorn is seeking to block a vote on the proposition that Apple intends to conduct during its next shareholder meeting on February 27. Judge Sullivan stated that he wasn't entirely convinced that Greenlight would suffer "irreparable harm" if the vote goes through, and is inclined to let it happen since the results could be undone if he later finds that Apple violated SEC rules. Einhorn actually supports two of the three items in the proposition, but strongly opposes the third, which would let Apple issue preferred shares without a shareholder vote. Judge Sullivan said that he will issue a ruling on Einhorn's request to block the shareholders from voting before they gather next Wednesday. It's seeming likely that Sullivan -- who called the situation "a mess" -- will simply wait to see what the shareholders decide before taking further action. For his part, Apple CEO Tim Cook is calling the hole thing a "silly sideshow."
Apple blasts shareholder lawsuit in court response
Just a few days after Apple CEO Tim Cook referred to a shareholder lawsuit spearheaded by Greenlight Capital fund manager David Einhorn as a "silly sideshow," the company filed its formal response to the lawsuit. As one would expect, the response is rather harsh. As noted in MacNN's analysis of the response, Apple found that Einhorn's plan was "self-serving," with even Einhorn himself referring to the proposal as a "roadblock." In previous coverage of this lawsuit, we noted that it was brought on by a desire by shareholders to have Apple distribute more of its sizable cash hoard through dividends. Einhorn had made a proposal asking for the issuance of "perpetual" preferred shares of AAPL that would pay a larger dividend than common stock. Apple has a proposal coming up for vote at its general meeting on February 27 to prevent any distribution of preferred shares without the approval of shareholders, and Einhorn's not happy with that. In Apple's response, the company notes that Einhorn's plan -- which calls for the preferred shares to be called "Greenlight Opportunistic Use of Preferreds" or GO-UPs -- has little benefit to anyone except Greenlight Capital. To paraphrase the title of a book by Einhorn, he appears to be trying to "fool some of the people all of the time" with his proposal. Apple CFO Peter Oppenheimer declared to the court that Einhorn referred to his lawsuit as a "roadblock" in a conversation between the two, and the company calls for the lawsuit to be dismissed for any one of four reasons listed in the response. First hearings on the lawsuit are scheduled for February 19, and Greenlight must file its response to Apple's claims by this Friday.
Tim Cook: Shareholder lawsuit is a 'silly sideshow'
You may recall a TUAW post last week about a shareholder lawsuit spearheaded by Greenlight Capital fund manager David Einhorn. The lawsuit essentially claims that Apple isn't doing enough to make sure that shareholders are receiving the benefits of the company's success, and contests a proposition to add a requirement to Apple's charter forcing any move to issue preferred stock to be approved by common shareholders. Apple CEO Tim Cook, speaking at a Goldman Sachs investor conference today, referred to the lawsuit as a "silly sideshow." According to our sister site TechCrunch, Cook commented during the conference that the approval process by common shareholders was part of a 2012 look at how Apple could improve its governance. According to Cook, "I find it bizarre that we would find ourselves being sued for something that's good for consumers." Cook's personal preference? To have both sides take any money that would be wasted in fighting a lawsuit and donate it to a worthy cause. Cook thinks that the lawsuit is "a waste of shareholder money, and it's a distraction, and it's not a seminal issue for Apple." Regardless of whether the proposition makes it into the Apple corporate charter, Cook said that the company will insist on a vote from common shareholders before any preferred stock is issued.
