Hewlett-Packard Co. and HP heir Walter Hewlett are awaiting a Delaware judges ruling that could derail the companys buyout of Compaq Computer Corp., after both sides fired off final salvos in their court battle over allegations HP misled and strong-armed investors to win a close proxy fight.
Following last weeks bitter trial, highlighted by a 7-hour grilling of HP Chairman and CEO Carly Fiorina, HP attorneys argued in a final legal brief submitted that Hewlett failed to show HP executives were guilty of any misconduct.
“The time has come to force Walter Hewlett and his team to face reality,” HPs attorneys stated in the brief. “They lost.”
Hewletts attorneys offered a starkly different perspective in their filing, made public Monday, claiming that testimony by HP executives served to confirm the allegations that they misled shareholders by touting optimistic earnings projections to investors that contradicted their own internal reports.
Specifically, Fiorina and HP Chief Financial Officer Bob Wayman revealed their guilt when they were unable to demonstrate why their publicly released forecasts featured deficit projections that were about $2 billion less than two internal HP reports, revealed in court, had projected, the lawyers argued.
“Where are the documents confirming the Fiorina/Wayman scenario?” Hewlett attorney Lawrence Ashby argues in the brief.
Since HP fed investors misleading information, Ashby argued, shareholders were unable to make an informed decision on the buyout. He also reiterated Hewletts claim that HP illegally pressured Deutsche Bank into getting its investment division to vote its HP shares in favor of the buyout. As a result, the court should void HPs March 19 shareholder vote, the lawyers argued.
“The stockholder vote on the merger was neither free nor fair,” Ashby said in the court document.
The final say in the case rests with Judge William Chandler III of the Chancery Court in Wilmington, Del. At the conclusion of last weeks testimony, Chandler said he would issue a decision quickly.
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