Apple (NASDAQ:AAPL) has withdrawn the preferred stock proposal from its annual shareholders meeting proxy after being on the losing end of a court decision regarding it on Friday. A Manhattan district court ordered an injunction on the proposal at the request of the hedge fund Greenlight Capital.
“We are disappointed with the court’s ruling,” Apple said in a statement. “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.”
David Einhorn’s Greenlight started the argument after alleging that the said proposal would prevent Apple from issuing perpetual preferred shares. He said he wanted Apple to launch preferred share options called iPrefs as one measure to distribute more of its cash hoard to shareholders.
The lawsuit was based largely on Einhorn’s allegation that Apple had put the proposal in its proxy in combination with two other proposals, thus unfairly “bundling” them together and breaking U.S. Securities and Exchange Commission rules in the process…