Greenlight Capital is suing Apple in an effort to get Apple to send back more of its $137 billion cash reserves in the form of shareholder dividends. Apple took this fairly seriously, and issued a press release explaining where they were at on the issue, including the fact that the Cupertino-based company has already given shareholders $10 billion of a planned $45 billion in cash.
Today, however, a judge in the US Court for the Southern District of New York approved a request by both parties in the suit to move the timetable for a response, with Apple planning to file by the end of the day this coming Wednesday, according to a report in the Wall Street Journal.
Greenlight Capital plans to reply by Friday, and both parties would like to see a hearing happen early next week. All of this comes fairly close to the planned financial shareholder meeting on February 27, which explains the haste. The law firm of O’Melveny & Meyers, representing Apple, requested the earlier timetable due to the “imminent Apple shareholder meeting that the proposed motion would affect.”
The other reason for the request for an early filing is that George Riley, a partner in the legal firm and a close friend of the late Steve Jobs, will be arguing the case for Apple. The request letter says that Mr. Riley is a fairly busy lawyer, and has hearings in Texas on Wednesday and Friday, “making a Tuesday hearing optimal, if the court can accommodate it.”
The suit itself is a plan to stop the vote on proposal two of Apple’s proxy, which includes the $5 billion payout as mentioned above. The Greenlight fund is run by David Einhorn, who wants to get Apple to issue a special type of preferred stock to return more than the planned $45 billion to shareholders. In addition, Einhorn says that the way Apple is bundling three items within the one proxy proposal violates US Security and Exchange Commission (SEC) rules.
- Source The Wall Street Journal