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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Lynn who wrote (96864)	4/7/2002 1:59:06 PM
From: Lynn	Read Replies (1) \| Respond to of 97611

Judge Delays Motion Ruling To Dismiss Suit Against H-P (This story was originally published by Dow Jones Newswires) WILMINGTON , Del. -(Dow Jones)- A Delaware state court judge Sunday said he needs more time to review the evidence before issuing a ruling on whether to allow a suit by dissident board member Walter Hewlett to proceed against Hewlett-Packard Co . (HWP). Judge William B. Chandler III of the Delaware Chancery Court said he will issue a ruling in the coming days. The decision on whether to allow the suit to proceed will impact the company's $19 billion merger with Compaq Computer (NYSE: CPQ - news) Corp. (CPQ). (This story was originally published by Dow Jones Newswires) Hewlett filed a lawsuit contending H-P improperly coerced a large shareholder, Deutsche Asset Management, a unit of Deutsche Bank AG (Other OTC: DTBKY - news) (DB) into switching a large block of shares in favor of the deal. Hewlett, son of one of the late co - founders, was the sole board member to oppose the $19 billion merger of H-P and Compaq. The shareholder votes are still being counted, but H-P has said it has received enough votes to proceed with the merger. A trial to consider the lawsuit is scheduled for April 23 . There are two key issues before Judge Chandler. The first is Deutsche's change of heart at the voting booths. Hewlett asserts Deutsche, which is the co - arranger under one of H-P's credit lines, changes its votes under pressure from the company. As reported, Hewlett has alleged H-P coerced Deutsche into switching 17 million of its 25 million votes in favor of the merger. "Deutsche Bank was fearful of what would happen if it voted (against the motion)," said Lawrence C. Ashby, an attorney with Ashby & Geddes, the firm representing Hewlett. H-P contends the reason behind Deutsche's vote isn't relevant. "Deutsche Bank based its vote on its own business judgment," said Donald J. Wolfe Jr., an attorney with Potter Anderson & Corroon, the firm representing H- P. "The court does not need to consider (Deutsche's) business judgment." The second issue is whether H-P intentionally based its financial projections on false and misleading information, and, if so, whether the impact was material enough to sway shareholder votes. Hewlett's side said shareholders weren't given enough truthful information to make an informed decision on which way to vote. The suit states that H-P knew cost savings and revenue losses wouldn't be consistent with its projections and that "either higher revenues were going to have to be found or other costs were going to have to be cut," to meet the projections. The alleged misleading information includes the company's projection of having to slice 15,000 jobs, a figure well shy of the 24,000 jobs Hewlett claims will need to be cut in order to meet the company's cost-savings estimates. At Sunday's hearing, H-P argued that "statements about future events and performance are not guarantees," and the court shouldn't consider their accuracy in ruling on the company's motion to dismiss, said Steven M. Schatz, an attorney with Wilson Sonsini Goodrich & Rosati, a second firm representing H-P. "The accuracy of the projections won't be determined for years," Schatz said. The task before Judge Chandler is to decide whether sufficient facts exist to warrant consideration of the lawsuit. Sunday's hearing and the forthcoming ruling aren't dealing with the merits of the lawsuit. If Hewlett is allowed to proceed with the lawsuit, the merits of it will be argued at the April 23 trial. Several shareholders made the trip to Sunday's hearing from locations across the country. Most support H-P's motion to dismiss. "I stand behind the company on this one," said Kinsey Halater, who came from Atlanta . "I hope the judge will find Hewlett's suit has no legal standing." -By Tom Becker, Dow Jones Newswires; 302-656-8830; tom.becker@dowjones.com biz.yahoo.com