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.
A judge handed hedge fund star David Einhorn a victory in his court battle with Apple Inc on Friday, blocking the iPhone maker from moving forward with a shareholder vote on a controversial proposal to limit the company’s ability to issue preferred stock.
At the recent Goldman Sachs Technology conference, Apple CEO Tim Cook stood by Proposal 2 calling Greenlight’s suit a “silly side show”:
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“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.