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Judge delays ruling in Apple shareholder case

February 19, 2013|By Chris O'Brien
  • Apple and dissident shareholder Greenlight Capital met in a New York courtroom Tuesday.
Apple and dissident shareholder Greenlight Capital met in a New York courtroom… (Kimihiro Hoshino/AFP/Getty…)

A federal judge on Tuesday declined to make a quick ruling on an investor's request to block a vote at Apple's annual shareholder meeting next week. 

Greenlight Capital has objected to a measure on Apple's proxy that would change the rules for issuing a special class of stock. The investment firm had filed a lawsuit and asked for a temporary injunction to prevent a vote at the shareholder meeting scheduled for Feb. 27.

After a volley of filings and rebuttals in the case, both sides appeared Tuesday in U.S. Federal District Court in New York City to make their cases. After listening to both sides, U.S. District Judge Richard Sullivan said he would not immediately rule from the bench, but that he would issue an order before the shareholders meeting, according to Bloomberg

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Greenlight appeared to make remarks from the bench that could be interpreted to favor both sides. On one hand, Bloomberg reported that the judge said Greenlight has produced enough evidence to indicate the "likelihood of success on the merits."

However, the judge is not being asked to rule on the merits of the underlying case. Rather, he is being asked whether allowing the vote to be held would cause "irreparable harm" to Greenlight's case. On that point, he "questioned whether the hedge fund would necessarily be harmed if Apple moves forward with the vote," according to the Bloomberg story.

Greenlight's David Einhorn has been lobbying Apple for the last year to issue a special class of stock to reward shareholders and as a way to distribute the enormous pile of cash Apple has on its balance sheet. Einhorn moved to sue after learning that Apple had placed a measure on its proxy that would require a shareholder vote to approve distribution of such stock. 

Apple CEO Tim Cook has labeled the legal dispute a "silly sideshow." He noted that even if the measure did not pass, Apple would still ask shareholders to approve any new stock.  


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Follow me on Twitter @obrien.

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