Apple Wins Early Hearing, Attacks Greenlight Lawsuit

Feb 12 2013 | 1:44pm ET

Apple Inc. has won an expedited hearing on Greenlight Capital's lawsuit against it as the company took aim at one of its largest—and previously most enthusiastic—investors.

A federal judge in New York moved up the lawsuit's schedule by a few days after Apple complained it would have an impact on its Feb. 27 shareholder meeting. Initial oral arguments on the complaint will now come on Feb. 19.

Greenlight, which last week sued Apple in an effort to block its plan to do away with preferred-share issuances, did not object to moving the hearing forward. The hedge fund alleges that Apple's proxy this year violates Securities and Exchange Commission rules by bundling unrelated matters, in this case simple-majority voting for directors and setting a par value for common stock, both of which Greenlight support. Greenlight founder David Einhorn fears that ending preferred shares would prevent Apple from acting on his demand that it return some of its $137 billion in cash to investors; he has said the company's cash-horde reminds him of his Great Depression-scarred grandmother's behavior.

Apple said the proxy does not violate the bundling ban, since all three measures are designed to improve corporate governance.

Apple's CEO also spoke out today against the lawsuit, calling it a "silly sideshow." Tim Cook pointed to his company's $10 billion in capital expenditures last year and said, "I don't know how a company with a Depression-era mindset would have done all those things. We do have some cash, but it's a privilege to be in this position."

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