A federal judge on Friday ordered Apple to halt collecting shareholder votes on a contentious proposal to change some of its corporate charter, handing a victory to the hedge fund manager David Einhorn.
Mr. Einhorn’s firm, Greenlight Capital, has sued the iPad maker in federal district court in Manhattan, arguing that the company improperly tied together several shareholder in one voting matter. Such “bundling,†lawyers for the hedge fund argued, violated securities laws.
At the heart of the hedge fund’s complaint was that Apple combined a plan to eliminate its ability to issue preferred stock without shareholder approval with two other initiatives that Greenlight favored.
By allowing the vote to proceed, lawyers for the firm argued, Greenlight was being forced to vote against its own interests.
The judge overseeing the ase, Richard Sullivan, firmly agreed with that interpretation.
“Given the language and purpose of the rules, it is plain to the court that Proposal No. 2 impermissibly bundles ‘separate matters’ for shareholder consideration,†Judge Sullivan wrote in his order.
His ruling orders Apple to stop accepting shareholder votes on Proposal No. 2, and comes just days before the company’s shareholder meeting next Wednesday.
Apple had argued that the plan in its entirely was actually shareholder-friendly, and enjoyed the backing of prominent investors like the California Public Employees Retirement System.
Representatives for Greenlight and Apple weren’t immediately available for comment.
Ruling for Greenlight Capital in Battle With Apple by
