A judge has ruled that Hewlett-Packard (HP) is to face trial over director Walter Hewlett’s claims that it rigged the shareholder vote approving its $19 billion takeover of Compaq.
In his 28 page decision, which was released on Monday, Delaware Chancery Court Judge William B Chandler found that Hewlett’s case was strong enough to go to court, after having listened to arguments from both sides in a rare two hour hearing on Sunday morning to determine whether the case should be thrown out at the earliest possible stage.
Hewlett alleged that HP’s management had indulged in “congnizable vote buying” and false statements to influence the outcome of the vote.
In a lawsuit filed last month, he asked for almost a quarter of the votes to be discounted, while at the same time accusing HP of giving Deutsche Bank, which owns just over one per cent of the IT vendor, new business in exchange for switching to a yes vote at the eleventh hour.
According to Hewlett, the vote, which took place at a shareholder meeting on 19 March and has yet to be ratified, was won by HP with a margin of only one per cent on the nearly two billion votes.
Lawyers for HP argued, however, that Hewlett’s lawsuit was a “last gasp attempt by the apparent loser of a proxy battle to obtain from the court what he could apparently not win at the ballot box”.
The trial is now scheduled for 23 April.