City Must Decide Soon Whether To Pursue Apple
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The deadline is approaching for the city to decide whether it will push ahead with its shareholder lawsuit against Apple Inc.
Earlier this month, a federal judge in San Jose, Calif., threw out the first attempt by the New York City Employees’ Retirement System to sue Apple on claims the company illegally backdated stock options and diluted stock value for other shareholders. In the decision, Judge Jeremy Fogel of U.S. District Court said that because Apple’s stock price did not drop, the plaintiffs had no basis to sue for damages. The judge did leave open the option that NYCERS could refile a derivative action on behalf of all shareholders, although it would be ineligible to collect damages.
No decision has yet been reached on whether to refile the lawsuit, two city officials have said.
“We are currently discussing our options about which avenue to pursue at this time,” a spokesman for the office of the city comptroller, Edwin Molina, said.
A decision to sue again — Judge Fogel set the deadline to do so in the middle of December — would be unusual in that the city’s pension funds do not usually bring derivate suits in which they don’t stand to directly receive damages. Any money won against the Apple officials named as defendants in a derivative suit would go back to Apple and to paying legal fees.
NYCERS, which owns about 1 million shares of Apple, was represented in its suit against the company by the law firm Grant & Eisenhofer.
NYCERS’ suit claimed that Apple gave out more than 200 million shares that weren’t disclosed and diluted the value of the value of stock held by investors.
Apple did not return calls for comment yesterday.
