In response to a court ruling today in favor of hedge fund manager David Einhorn, Apple pulled a proxy proposal that would eliminate the ability to issue "blank check" preferred stock without the approval of investors.Apple has issued a statement regarding the decision by U.S. District Judge Richard Sullivan, who gave Einhorn offers to block a shareholder vote next week on the proposal:
"We are disappointed with the court's decision. Proposal No. 2 is part of our efforts to improve corporate governance and serve the best interests of our shareholders. Unfortunately, due to today's decision, the shareholders will not be able to vote on the proposal # 2 in our annual meeting next week. "Greenlight Capital, a hedge fund run by the famous short-seller Einhorn sued Apple on February 7, saying the company needed distribute preferred shares to current shareholders and Apple had dropped the idea when it was first discussed. Einhorn argues that high-yield issuance of preferred shares to existing shareholders would allow Apple to share the value on the balance sheet but still contain a large amount of money.
Apple last proxy statement, which details the elements of a vote at its shareholders' meeting on February 27, included a proposal that would eliminate the preferred shares. Einhorn suit sought an injunction to prevent Apple from this provision together with several other articles. Instead, he wanted every item to be voted separately.
