A US federal judge found credence to the arguments of hedge fund manager David Einhorn versus Apple Inc. The judge issued a restraining order against Apple's holding of a shareholder vote to decide on a proposal to limit the company's power to issue preferred shares of stock.
US District Judge Richard Sullivan granted the injunction for the February 27 scheduled shareholder meeting. With this, Einhorn gains more leverage against the issuance of what he called as 'iPref'. These are preferred stock with a perpetual dividend which he views as rewarding investors and at the same time boost the share price of the company.
The suit by Greenlight Capital against Apple Inc was filed last February 7 as one of the initial salvos to force Apple to release more than US$137 billion in cash. Einhorn has gone on record to lobby for Apple to create the preferred stock with perpetual dividend.
Apple for its part says that the lawsuit is a 'silly sideshow'.
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