According to a report from Reuters, following a request from Greenlight Capital, a judge has blocked Apple from going through with a shareholder proposal that would require a shareholder vote before issuing preferred stock. The request by Greenlight Capital’s David Einhorn followed a lawsuit that claimed Apple’s upcoming “Proposal 2” does not adhere to regulatory rules. Greenlight argued the proposal bundled three distinct proposals; the hedge fund manager backs two of them, but not the third proposal regarding preferred stock. Reuters reported today that U.S. District Judge Richard Sullivan granted Einhorn a preliminary injunction that would block the vote on the proposal originally scheduled for Feb. 27 at Apple’s annual shareholders meeting.
Judge blocks Apple from allowing shareholder vote at annual meeting concerning bundled preferred stock proposal. #BREAKING $AAPL
— Reuters Top News (@Reuters) February 22, 2013
At the recent Goldman Sachs Technology conference, Apple CEO Tim Cook stood by Proposal 2 calling Greenlight’s suit a “silly side show”:
“So, it doesn’t mean Apple won’t release preferred share. It means we need to go to common shareholders to get their approval,” he explained. “Frankily, I found it bizarre that we are being sued on that is something good for shareholders, but this is the position we’re in. It’s a silly side show.”
Apple and Greenlight Capital have not yet publicly responded to the court’s decision.
