Legal News

Apple Blasts Greenlight Capital in Court
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)
Loading...

On Wednesday, Apple moved to get back at Greenlight Capital and its owner David Einhorn after, last week, Greenlight Capital sued Apple in the U.S. District Court in Manhattan in an attempt to block a shareholder’s vote scheduled on Fe. 27.

In its filing, Apple revealed explosive details of a meeting between Apple CEO Tim Cook and Greenlight’s Einhorn, during which Einhorn vehemently opposed the idea of removing an existing provision “Proposal No.2” that currently allows the issuance of preferred shares at the sole discretion of the company, without requiring the approval of shareholders.

According to Apple, Einhorn wanted the company’s sole discretion in the matter to stay and override shareholder opinions, while, apparently, Apple wanted to remove the debacle.

  
What
Where


According to the filing, Einhorn “viewed requiring shareholder approval for his … proposal as a ‘roadblock that was not needed,” and that “He said that he wanted to ‘take the risk away’ of a shareholder vote and asked ‘why make it harder?’”

The filing was made by Apple’s Chief Financial Officer Peter Oppenheimer.

In the declaration, Oppenheimer also added, “We told Mr. Einhorn that Apple was considering his proposal, but the Board would not issue his proposed perpetual preferred shares without shareholder approval.”

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!




Apparently, as part of its strategy to send more of Apple’s cash hoard to the coffers of investors, Einhorn wanted Apple to issue perpetual preferred stock with a 4 percent dividend to existing shareholders.

This is the reason why Greenlight wanted to block shareholders voting on Proposal 2 and allowing the company to divest itself of the power it still possesses to issue preferred shares to existing investors.



The Proposal No.2 also seeks majority voting for directors by amending the company’s articles of incorporation.

In its lawsuit, Greenlight accused Apple of bundling three different proxy proposals into one, and thus violating SEC rules.

However, Apple said in its motion, “Bundling occurs when discrete, material proposals are combined in a manner that puts shareholders to an unfair choice … That is not the case here.”

Apple also submitted that the Proposal No.2 had been made in response to a report by Institutional Shareholder Services, which had observed that the “blank check” of issuing preferred shares without shareholder approval could be abused as the defense for a takeover.

The case is Greenlight Capital LP, et al., v. Apple Inc., U.S. District Court, Southern District of New York, 13-900.



 

RELEVANT JOBS

LITIGATION PARALEAL

USA-LA-Baton Rouge

LITIGATION PARALEGAL Job Description Immediate opening: Downtown law firm seeking experienced ...

Apply now

Paralegal

USA-LA-Baton Rouge

  LITIGATION PARALEGAL Job Description Immediate opening: Downtown law firm seeking ex...

Apply now

Associate Attorney

USA-TX-El Paso

Flores, Tawney & Acosta PC is seeking a new to 4-year attorney to join its growing plaintiff’s...

Apply now

Legal Secretary

USA-NJ-Tuckerton

Seeking a full time legal secretary in a small firm located at the Jersey Shore. Prior law firm expe...

Apply now

BCG FEATURED JOB

Locations:

Keyword:



Search Now

Junior Partner level Corporate and Securities Attorney

USA-IL-Chicago

Chicago office of a BCG Attorney Search Top Ranked Law Firm seeks junior partner level corporate and...

Apply Now

Public Works Construction Attorney

USA-CA-San Diego

San Diego office of a BCG Attorney Search Top Ranked Law Firm seeks public works construction attorn...

Apply Now

Public Works Construction Attorney

USA-CA-Los Angeles

Los Angeles office of a BCG Attorney Search Top Ranked Law Firm seeks public works construction atto...

Apply Now

SEARCH IN ARCHIVE

To Top