David Einhorn reiterated his arguments Friday that a judge should block a
shareholder vote on Apple Inc's proposal to eliminate its ability to
issue preferred shares without investor approval, days before a court
In court filings in U.S. District Court in Manhattan,
Einhorn's Greenlight Capital attempted to rebut Apple's arguments that
the company's proposal was "pro-shareholder."
"Apple should not be
allowed to substitute its judgment for its shareholders' judgment, and
should be enjoined" from letting the vote proceed, Greenlight said in a
A hearing on Einhorn's motion for an injunction against
the February 27 vote on the proxy proposal is set for Tuesday. A
spokesman for Apple declined comment.
Greenlight sued Apple last
week as part of Einhorn's larger effort to have the iPhone maker share
more of its $137 billion in cash with investors.
As part of that
goal, Einhorn has pushed for Apple to issue to its shareholders
perpetual preferred stock with a 4 percent dividend.
Apple proxy proposals up for a vote February 27 is Proposal No. 2, which
would remove the company's current system of issuing preferred stock at
its discretion without a shareholder vote.
contends Apple violated U.S. Securities and Exchange rules by "bundling"
three separate amendments to its charter into Proposal No. 2. While
Greenlight supports two of the amendments, it does not back the one
related to preferred stock.
Apple in a Wednesday filing argued the
proposal was not bundled and that it had not forced shareholders into
an unfair choice. It also noted Proposal No. 2 was supported by proxy
advisory services Institutional Shareholder Services and Glass, Lewis
But Einhorn argued on Friday that ISS and Glass Lewis's
support is premised on the belief that eliminating so-called "blank
check" preferred stock powers enables a company to defend itself against
"In my view, Apple is not a realistic take-over
candidate because of, among other things, its enormous market
capitalization," Einhorn wrote.
At Tuesday's hearing, U.S.
District Judge Richard Sullivan will also hear a separate challenge by
an Apple investor from Pennsylvania to block not just the Proposal No. 2
vote, but also an advisory "say-on-pay" vote on executives
The investor, Brian Gralnick, contends Apple has not
disclose enough details about how it made its decisions in awarding
restricted stock units to certain executives.
Apple responded that its disclosures were adequate and appropriate.
The case is Greenlight Capital LP, et al., v. Apple Inc., U.S. District Court, Southern District of New York, 13-900.
© Thomson Reuters 2013