If a company that you own stock in goes bankrupt, as acommonshareholder, you won't receive moneyuntilthe creditors, bondholdersandpreferred shareholders have all been paid off.
Greenlight Capital, a hedge fund run by Wall Street maverick David Einhorn, sued Apple over the proposal because it would remove the board's ability to issue preferred stock without shareholder authorization.
The lawsuit itself challenged a measure called Proposal No. 2 that Apple put forward, which would eliminate its power to issue preferred shares without a shareholder vote.
The company claims it came up with the idea of requiring a shareholder vote on preferred stock last May, before Einhorn began his crusade, but Einhorn raised the issue in a conference call that same month.