Judge accelerates hedge fund's lawsuit against Apple
Apple had requested an expedited hearing schedule over a lawsuit that seeks to get the company to share more of its cash reserves with investors.
A federal judge has approved Apple's request to fast-track a lawsuit filed last week by hedge fund manager David Einhorn's Greenlight Capital in an effort to get the electronics giant to share more of its massive cash reserves with investors.
U.S. District Judge Richard J. Sullivan for the Southern District of New York granted Apple's request, moving forward the schedule for a hearing on a. Apple had argued that the proposed meeting would have an effect on its shareholder meeting later this month.
The modification request suggested that document filing dates be moved up by two to three days and that arguments be scheduled for as early as February 19, three days ahead of the previous February 22.
Greenlight Capital, a hedge fund run by the famed short seller Einhorn, sued Apple on February 7, asserting that the company needed to distribute preferred stock to current shareholders and that Apple had balked at the idea when it was first discussed. He argues that issuing high-yielding preferred shares to existing shareholders would allow Apple to share the value on the balance sheet but still hold a large amount of cash.
Apple's latest proxy statement, which details items up for a vote at its February 27 shareholder meeting, includes a proposal that would eliminate "blank check" preferred stock. Einhorn's suit seeks an injunction to prevent Apple from bundling that provision with several other items. Rather, he wants each item to be voted on separately.
The company has defended its management of its cash reserves, which totaled more than $137 billion in cash and securities as of December, saying it has already delivered $10 billion of its plan to return $45 billion to shareholders over three years. It reinitiated a dividend last year and also has plans to buy back stock.