Sun, Feb 17, 2013 - Page 5 News List

Apple Inc breaking law over measures vote: Greenlight

Bloomberg

Apple Inc 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 Inc said in a court filing.

David Einhorn’s investment firm said in a brief filed on Friday in US federal court in Manhattan that Apple’s move would cause “an actual and imminent injury” to investors.

The Feb. 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 US Securities and Exchange Commission (SEC) “unbundling” rules it alleges Apple is violating.

“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 on Wednesday that it was not breaking SEC rules and that the preferred share measure was not as restrictive as Greenlight alleges.

Einhorn, whose firm says it holds more than 1.3 million Apple shares, has argued that the Cupertino, California-based company should issue high-yielding preferred shares to return value to investors from a US$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 filing on Wednesday by Apple chief financial officer Peter Oppenheimer.

Apple contends the measure that Greenlight opposes only eliminates so-called blank check preferred-stock provisions. Without those provisions, preferred shares could be issued as long as investors approve, Apple said.

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