Will Apple’s Meeting Become A Battleground?

Apple’s (NASDAQ:AAPL) annual shareholder meeting appears headed for a fierce battle after ISS Proxy Advisory Services urged the company’s investors to vote in favor of the a proposal hedge fund Greenlight Capital is opposing in court.

Earlier this week, Greenlight, led by manager David Einhorn, said it was opposed to a proposal in Apple’s meeting proxy that was designed to eliminate the option of issuing preferred stock. The fund even filed a lawsuit against the iPhone maker in a New York federal court in an attempt to stop it from going to vote.

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Apple reacted by releasing a statement that said the proposal was only to start requiring shareholder approval before issuing such stock, and not eliminate it altogether. However, Einhorn has stuck to his stand, complaining that the company also illegally bundled the proposal along with two others. This was a ploy to get shareholders to either agree to all three proposals or have all three rejected, Einhorn alleged, insisting the practice violated U.S. Securities and Exchange Commission regulations.

Apple already had the support of the California Public Employees’ Retirement System, a group with a large stake in the company. Now, with the influential advisory group that caters to institutional investors throwing its weight behind the company, Einhorn’s battle looks solitary…

“ISS policy supports the elimination of ‘blank check’ preferred shares, because of their potential to be misused in a takeover defense,” the firm said in a note on Friday, according to The Wall Street Journal. In addition, even if Apple were to eventually issue such stock shareholder opposition would prove to be “an insurmountable obstacle.”

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Einhorn declared his disappointment with the ISS position. “We are disappointed that they did not recognize the unique circumstances surrounding a company with $137 billion of cash on its balance sheet and no realistic potential for being a takeover target,” he said in a statement on Friday. “All shareholders should send Apple’s board a clear message by voting against Proposal 2.”

ISS did say it was opposed to Apple bundling the proposal with other measures. “ISS generally believes bundling of proposals is not in the best interest of shareholders,” it said.

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