A federal judge has ruled against Apple Inc. in a dispute with hedge fund Greenlight Capital and its manager, David Einhorn, who has launched a crusade aimed at forcing the tech giant to pay out more of its enormous cash stockpile to shareholders.
U.S. District Judge Richard Sullivan in Manhattan granted Greenlight's motion to block Apple from proceeding with a vote on a company proposal limiting its ability to issue preferred shares, which generally pay a perpetual dividend.
The vote had been scheduled to take place during Apple's annual stockholders' meeting on Wednesday.
The hedge fund, one of Apple's shareholders, sued the company early this month for having bundled that proposal with two other amendments that the famed Wall Street manager supported.
Greenlight's attorneys argued that Apple's move to combine the measures into a single proxy proposal would force the fund to vote against its own interests and violate U.S. Securities and Exchange Commission rules.
In granting the preliminary injunction, the judge accepted the plaintiff's argument that it could suffer "irreparable harm" and said the different proposals must be voted on separately.
Einhorn wants the tech titan to issue so-called "iPrefs," preferred shares with a perpetual dividend that would ensure the company headed by Tim Cook distributes a portion of its more than $137 billion cash pile to shareholders.
The judge gave the two parties until Friday to submit a joint letter detailing their next contemplated steps in the case. EFE