| SAN FRANCISCO
SAN FRANCISCO Feb 11 A U.S. judge approved
Apple Inc's request to speed up the schedule in a
lawsuit filed by star hedge fund manager David Einhorn's
Greenlight Capital, part of an effort to get the company to
share its huge cash reserves with investors.
U.S. District Judge Richard Sullivan of the Southern
District of New York on Monday brought forward the legal
schedule by a few days at Apple's request, which argued that the
issue would have a big impact on the upcoming shareholder
meeting on Feb. 27.
Apple told the judge that the request to modify the schedule
had the support of Einhorn's counsel.
Einhorn, a well-known short-seller and Apple gadget fan,
shocked Wall Street last week by suing Apple to stop the iPhone
maker from eliminating from its charter the ability to issue
preferred stock without shareholder approval.
He wants Apple to return a bigger piece of its $137 billion
cash pile to investors, through the issuance of perpetual
preferred shares that pay dividends to existing shareholders.
Einhorn is objecting to how the proposed charter change is
bundled together with two other corporate governance-related
proposals in the proxy document for the annual meeting.
The lawsuit contends Apple violated Securities and Exchange
Commission rules that prohibit companies from "bundling"
unrelated matters into a single proposal for a shareholder vote.
Apple says removing the board's ability to issue preferred
stock at its discretion heightens governance, because future
issuances would then require shareholder approval.
The company will file its response to the lawsuit by the end
of Wednesday while Greenlight will file its own response papers
by Friday. The judge ordered both parties to appear for oral
arguments on Feb. 19.
Apple has said that the proposal in its proxy had the
support of many shareholders, and striking such a "blank check"
provision from its charter would not preclude preferred share
issuances in future.
The law firm of O'Melveny & Myers LLP is representing Apple
in the case, with San Francisco-based partner George Riley
arguing for Apple.