04/07 13:05
Hewlett-Packard Judge Delays Decision on Plea to Dismiss Case
By Phil Milford
Wilmington, Delaware, April 7 (Bloomberg) -- A state judge delayed a decision on Hewlett-Packard Co.'s request to dismiss a case filed by dissident director Walter Hewlett to block the computer maker's $18.3 billion takeover of Compaq Computer Corp.
After a rare two-hour Sunday hearing in Delaware Chancery Court, Judge William Chandler III told lawyers for both sides he'd contact them ``soon'' with his decision on whether to allow Walter Hewlett's complaint to go forward as planned in two weeks.
The director, who the company plans to remove from the board, alleges Hewlett-Packard officials coerced shareholders to approve the takeover and made misleading statements about benefits of the acquisition. The suit says as many as a quarter of the proxies should be thrown out.
``This proxy contest should be decided by the stockholders'' not the courts, Hewlett-Packard lawyer Steven Schatz said in asking Chandler to dismiss the suit. To pursue his case, Walter Hewlett ``has to have credible evidence,'' and there is none, Schatz said.
``Management cannot put its thumb on the scale in that way,'' said Walter Hewlett's lawyer, Lawrence Ashby, referring to allegations in the complaint that Deutsche Bank AG, with about 1 percent of company stock, unfairly switched its vote to favor the deal at the last minute in exchange for loan business.
Ashby asked the judge to allow Walter Hewlett to continue gathering documents about its integration plans with Compaq and to begin a three-day trial on schedule April 23.
Shares of Palo Alto, California-based Hewlett-Packard, which reported $45.2 billion in fiscal 2001 sales and a $408 million profit, fell 26 cents to $16.99 Friday.
Shares of Houston-based Compaq, which reported $33.5 billion in fiscal 2001 sales and a $785 million loss, fell 2 cents to $9.56.
Hewlett-Packard is the second-largest computer maker in the world after International Business Machines Corp. |
