Greenlight Capital is suing Apple (Nasdaq: AAPL) in federal court in New York over attempts to eliminate preferred stock at the world’s most valuable company.

Greenlight wants Apple  to return more of its $137.1 billion in cash to shareholders.

Greenlight has asked fellow holders to vote against a proposal – outlined in the company’s annual proxy statement – that would eliminate preferred stock.

David Einhorn, who heads Greenlight, said Thursday that the proposal would restrict the ability of Apple’s board to unlock shareholder value. Some investors have been pushing Apple to do more with its enormous pile of cash.

The company started paying a dividend last year, but at $2.65 per share, it doesn’t measure up to other companies with similar cash reserves. Apple has also started to repurchase some of its shares, but Greenlight and others say it should be pushing its cash in another direction.

Greenlight, a shareholder since 2010 with 1.3 million Apple shares, said it is dissatisfied with the way the company allocates capital. Einhorn said his firm has been talking with Apple over the past several months about the creation of new preferred stock that would be distributed to Apple shareholders.

Apple, he said, rejected the idea in September.

A representative for Apple could not immediately be reached for comment early Thursday.

In a letter to Apple shareholders, Greenlight called Apple a “phenomenal company filled with talented people creating iconic products that consumers around the world love.” But it said the company has an “obligation to examine all options to create and unlock additional value.”

Apple, Greenlight continued, “has $145 per share of cash on its balance sheet. As a shareholder, this is your money.”

“Apple must examine all of its options to unlock the growing value of its balance sheet for all shareholders,” Einhorn added.

A decision by Apple to refrain from returning more cash to shareholders would leave its board vulnerable to investor lawsuits, according to Lawrence Haverty, a portfolio manager at Gamco Investors Inc.

“Someone is going to sue them for excessive accumulation of cash,” Haverty said in a late January interview on Bloomberg Radio’s “Surveillance” with Tom Keene.