Hearings began this week in David Einhorn's lawsuit against Apple, and right away the rockstar hedge-fund manager got the court to lean a little in his favor. This case is going to be fast and furious, particularly with an Apple event just a few days away that Einhorn would like to see postponed. Is Einhorn just playing the role of greedy investor, trying to puppet-string the stock market with a slick PR campaign? Or does this lawsuit actually have some legitimate legs?
Last week, we covered why David Einhorn's investment company, Greenlight Capital, was bringing suit against Apple; although it appears he has been given the cold shoulder by Cupertino executives for the past year, Einhorn's history of dramatic lawsuits also suggests some possible ulterior motives. However, right out of the gate, the judge overseeing this lawsuit announced he thought Einhorn was likely to win.
“I think success on the merits lies with Greenlight,” announced Federal judge Richard J. Sullivan at the end of the first day's hearing. Judge Sullivan also stated earlier in the day that he believed the way Apple was bundling issues for shareholders to vote on — a key Einhorn complaint — was likely against the rules.
Not a good start for the Cupertino legal team.
When I called this lawsuit "silly," what I meant was that I hope it just goes away.
In fact, the only thing that did not seem to go Greenlight's way was that Judge Sullivan did not rule on whether to grant Einhorn a preliminary injunction that would prevent Apple from holding shareholder voting on the questionable proposals. Not yet, at least. Apple had scheduled shareholder voting for February 27, and Einhorn would love to see that delayed pending the outcome of this case. According to The New York Times, Judge Sullivan is expected to announce his decision on this issue within days.
Round one clearly goes to Einhorn. Will it be enough to carry the case? Stay tuned, this one is going to move quickly. Either way, I guess this lawsuit isn't looking too "silly" anymore, is it Mr. Cook?
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