Apple says Greenlight suit not in shareholders' best interest, amendment 'unworkable'
In a filing with a New York District Court on Wednesday, Apple offered a point-by-point counter to a suit being levied by shareholder Greenlight Capital's David Einhorn, who is looking to strike a proxy proposal regarding preferred stock issuance from an upcoming shareholders' meeting.
Apple asserts that Einhorn's suit is holding shareholders "hostage" in an attempt to force the company into making a decision beneficial to the hedge fund chief's financials. As noted by the Financial Times, Apple's response to Einhorn's complaint is in line with comments made by CEO Tim Cook on Tuesday at the Goldman Sachs Internet and Technology Conference, where the executive called the lawsuit a ?silly sideshow.?
At issue is Apple's so-called "Prop 2" proxy proposal slated to be discussed at the company's upcoming shareholders' meeting at the end of February. Relating to company governance, Prop 2 would effectively wrest the power to issue preferred stock away from Apple's board and put it in the hands of shareholders.
Greenlight's Einhorn is seeking for the issuance of perpetual preferred shares, dubbed "Greenlight Opportunistic Use of Preferreds" or "GO-UPs," which would in theory allow Apple to mete out some of its $137 billion cash hoard with shares that pay higher than normal dividends. Apple claims the GO-UPs only serve Greenlight's financial interests and "do not serve the public interest."
From a legal standpoint, the suit targets Prop 2's "bundling" of multiple votes into one, a breach of U.S. Securities and Exchange Commission guidelines. For its part, Apple said the SEC reviewed the proxy statement and had no qualms with its contents.
From the filing:
Most recently, Presiding Judge Richard Sullivan agreed to accelerate the case's schedule by a number of days due to the quickly-approaching shareholder meeting. Greenlight is scheduled to file its own response by Friday ahead of oral arguments slated to start on Feb. 19.
Apple asserts that Einhorn's suit is holding shareholders "hostage" in an attempt to force the company into making a decision beneficial to the hedge fund chief's financials. As noted by the Financial Times, Apple's response to Einhorn's complaint is in line with comments made by CEO Tim Cook on Tuesday at the Goldman Sachs Internet and Technology Conference, where the executive called the lawsuit a ?silly sideshow.?
At issue is Apple's so-called "Prop 2" proxy proposal slated to be discussed at the company's upcoming shareholders' meeting at the end of February. Relating to company governance, Prop 2 would effectively wrest the power to issue preferred stock away from Apple's board and put it in the hands of shareholders.
Greenlight's Einhorn is seeking for the issuance of perpetual preferred shares, dubbed "Greenlight Opportunistic Use of Preferreds" or "GO-UPs," which would in theory allow Apple to mete out some of its $137 billion cash hoard with shares that pay higher than normal dividends. Apple claims the GO-UPs only serve Greenlight's financial interests and "do not serve the public interest."
From a legal standpoint, the suit targets Prop 2's "bundling" of multiple votes into one, a breach of U.S. Securities and Exchange Commission guidelines. For its part, Apple said the SEC reviewed the proxy statement and had no qualms with its contents.
From the filing:
According to a declaration from Apple CFO Peter Oppenheimer, also filed on Wednesday, Einhorn referred to the proposal as a "roadblock" in a conference call earlier this month. Oppenheimer informed the hedge fund manager that Apple was considering his proposal, but confirmed that the company's board would not issue GO-UPs without shareholder approval.In short, plaintiffs cannot show any hardship of not obtaining injunctive relief, much less hardship that is greater than the financial harm to Apple and its shareholders of not having Proposal No. 2 put to a vote.
Most recently, Presiding Judge Richard Sullivan agreed to accelerate the case's schedule by a number of days due to the quickly-approaching shareholder meeting. Greenlight is scheduled to file its own response by Friday ahead of oral arguments slated to start on Feb. 19.
Comments
Just keep trashing your rep Apple and involving yourself in silly sideshow (hypocrite much?) lawsuits. The only 2 things you're great at these days.
Quote:
Originally Posted by KingChael
Just keep trashing your rep Apple and involving yourself in silly sideshow (hypocrite much?) lawsuits. The only 2 things you're great at these days.
get a life and stop trolling.
The selfish greedy bastard is only looking rape the company.
Now, Einhorn will know his limits with Apple and go rape some other company.
And the one legal leg he has to stop Apple is this bundling issue which apparently Apple cleared already.
Oops.
I would like to think Apple can offer more in shareholder value than simply offering 2% dividend hike too. It's a talented company with an incredible platform. What IOS watch, home systems/appliances, car systems, etc. Where can Siri go? I want to see those billions put to work and keep Apple a growth company. Vertically integrate more of my life... please. (Long Apple of course.)
Maybe Apple should offer to transfer funds from overseas, so that Greenlight becomes liable for Taxation and can leave them to explain why paying 35% in tax to the Federal Government is good for shareholders.
This is one of those situations where I truly wish that Steve Jobs was still alive and I was the fly on the wall in the room where SJ and Einhorn are alone together.
Quote:
Originally Posted by wordguru
I would like to think Apple can offer more in shareholder value than simply offering 2% dividend hike too.
Well, let's see.... I was late to buy shares in the game (didn't really have money for stock when Apple was trading at $15), but my li'l bloc is already worth 500% of my initial investment (even with the latest hit). I'm not feeling slighted by management.