Greenlight Blocks Apple Proxy Proposal

Feb 25 2013 | 2:12pm ET

A federal judge has blocked Apple Inc.'s bid to put a proposal about preferred shares to its stockholders, a victory for hedge fund Greenlight Capital.

Greenlight had sued the computermaker to block the proxy, which it claimed violated Securities and Exchange Commission rules. Apple's proposal would have barred it from issuing preferred shares without first getting shareholder approval; Greenlight's David Einhorn has called on the company to issue such shares as a way of returning some of Apple's $137 billion cash horde to investors.

Apple said it would pull the proposal from its Wednesday meeting in the wake of U.S. District Judge Richard Sullivan's Friday decision, which found that Apple improperly bundled the preferred-share proposal with two unrelated corporate governance measures.

"We are disappointed with the court's ruling," Apple said. "Proposal No. 2 is part of our efforts to further enhance corporate governance and serve our shareholders' best interests. Unfortunately, due to today's decision, shareholders will not be able to vote on Proposal No. 2 at our annual meeting."

"This is a significant win for all Apple shareholders and for good corporate governance," Greenlight said in a statement.

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