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Hedge Fund Greenlight May Succeed in Case Against Apple: Judge

Tuesday, 19 Feb 2013 | 6:00 PM ET
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A U.S. judge said David Einhorn's hedge fund had shown a "likelihood of success" if his legal attack against Apple goes forward, though he made no immediate ruling on whether to block next week's shareholder vote on a proxy proposal.

U.S. District Judge Richard Sullivan on Tuesday reserved decision on Greenlight Capital's request to stop the Feb. 27 vote on one of Apple's shareholder proposals. That proposal would eliminate the iPhone maker's ability to issue preferred stock without investor approval.

"Candidly I do think the likelihood of success is in favor for Greenlight," Sullivan said at a court hearing in New York.

The hedge fund sued Apple earlier this month as part of Einhorn's broader attempt to get the company to send a bigger chunk of its $137 billion in cash to shareholders. The lawsuit contends Apple improperly "bundled" three proposed amendments to its charter into one proxy proposal, a violation of regulatory rules.

Sullivan did not specify when he would rule on Greenlight's injunction request. He said he would now focus on whether the fund would be irreparably harmed if the vote moves forward.

Steve Dowling, a spokesman for Apple, declined comment. A spokesman for Einhorn did not immediately respond to a request for comment.

The case is Greenlight Capital LP, et al., v. Apple Inc., U.S. District Court, Southern District of New York, 13-900.

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