Judge Blocks Vote on Proposal 2 at Next Week's Apple Shareholder Meeting

152516 apple logoA judge has decided to block a vote on Question 2 at Apple's annual shareholder's meeting next week, according to a report from Reuters.

Hedge fund Greenlight Capital, a major shareholder of Apple stock, filed a lawsuit earlier this month asking that Apple be prevented from bundling a number of proposals into one ballot question at the shareholders meeting. The firm argued that the bundling of three separate corporate governance proposals into one question was in violation of SEC rules.

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.

Proposal 2 contains language relating to the term of office of the board of directors, language about the board's ability to issue preferred shares of AAPL stock without shareholder approval, and the establishment of a par value for the company's common stock.

Apple CEO Tim Cook called the lawsuit a "silly sideshow" and "a waste of money for all involved", but the judge presiding over the case disagreed. Apple issued a statement in early January saying it was in "active discussions" about ways to return cash to shareholders as Greenlight head David Einhorn has requested.

Update: AllThingsD has the text of the judge's ruling.

Update 2: Apple has withdrawn Proposal No. 2 from its proxy statement, issuing this statement:

We are disappointed with the court’s ruling. Proposal #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 #2 at our annual meeting next week.

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Top Rated Comments

komodrone Avatar
148 months ago
can someone explain to me like a 9 year old on what the hell is going on?

how about explain it to me like a 5 year old?
Score: 11 Votes (Like | Disagree)
MTL18 Avatar
148 months ago
http://dealbreaker.com/2013/02/david-einhorn-wants-apple-to-issue-pretty-much-all-the-preferred-stock-in-the-world/



basically Einhorn thinks Apple should worth much more than it is right now. In order to reflect that he wants Apple to issue a ton of prefer stocks. Apple thinks that is crazy.

I found this report interesting. The investors and banksters that sent us into 2008 now want to tell the most valuable company in the world (that built it's value during their recession) what to do? And a judge says .... sure...

What a piece of junk system! My 0.02
Score: 8 Votes (Like | Disagree)
SeattleMoose Avatar
148 months ago
The best judicial decision money can buy. The sharks see the pile of cash and will do anything to get it. Einhorn represents everything that is wrong with our financial system. Pretending to be doing this on "behalf of the shareholders". As a shareholder I would much rather have Apple control what they do with THEIR money than some sleazy shark....
Score: 7 Votes (Like | Disagree)
ouimetnick Avatar
148 months ago
This is what I got from reading the article.
Score: 7 Votes (Like | Disagree)
MTL18 Avatar
148 months ago
can someone explain to me like a 9 year old on what the hell is going on?

how about explain it to me like a 5 year old?

In as simple of wording as possible - Apple tried to use some trickery on a shareholders vote. A judge deemed it a no go, as it violated rules of the securities and exchanges commission (SEC).
Score: 6 Votes (Like | Disagree)
Squilly Avatar
148 months ago
It's clear Apple doesn't like to lose...

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can someone explain to me like a 9 year old on what the hell is going on?

how about explain it to me like a 5 year old?

Apple was sued and lost.
Score: 6 Votes (Like | Disagree)