Feeds

Emulex says Broadcom unfit to take it over

Alleged cokehound ex-CEO allegedly still influential

HP ProLiant Gen8: Integrated lifecycle automation

Emulex has filed a law suit alleging that Broadcom is unfit to take it over because a still influential former Broadcom CEO faces federal drug charges.

Emulex is citing the charges in an application for an injunction to prevent the takeover.

Broadcom is trying to take over Emulex with a $9.25/share $764m offer. It wants to gain access to Fibre Channel over Ethernet (FCoE) technology which applies to server adapters (CNAs) and to Ethernet switches. The data centre market is consolidating onto Ethernet as the fundamental networking transport. Emulex is one of three Fibre Channel networking companies with FCoE technology in active development, the others being Brocade and QLogic.

The lawsuit was filed in California's Orange County Superior Court on Friday 29th May with case number 30-2009-00123829-CU-BT-CJC.

According to the Wall Street Journal, Broadcom co-founder and ex-CEO Henry T. Nicholas III faces federal drug-taking charges and sex-lair-related lawsuits. Lurid aspects of the allegations have been aired, including cocaine and Ecstasy addiction and an obsession with prostitutes.

Emulex' court filing says Nicholas is still very influential at Broadcom and was involved in hiring the current CEO, Scott McGregor, who joined Broadcom in 2005. Nicholas left Broadcom in 2003. Another Broadcom co-founder, Henry Samueli, is accused with Williams in the backdating of stock options. He has pleaded guilty and sentencing is awaited.

Emulex says Broadcom is not an honest enterprise, because it has not revealed this pertinent information. They suggest that fraud and permanent injury to Emulex may be the outcome if the takeover is successful.

The WSJ quotes a Broadcom response to this suit which talks of mud-slinging and scorched earth tactics, and the assertion that none of this is relevant to the takeover offer.

It now looks less likely that Emulex wants Broadcom to come back with a better takeover offer. Each side's senior management antipathy to the other has just been raised way beyond the level at which post-takeover co-operation is possible. This lawsuit could be considered a contested takeover ritual, and not to be considered personal at all.

On the other hand, accusing the company behind a takeover of being influenced behind the scenes by a stock options-backdating cokehound and sex addict seems to go slightly beyond the normal bounds of acceptable corporate critical behaviour. ®

Reducing security risks from open source software

More from The Register

next story
Sysadmin Day 2014: Quick, there's still time to get the beers in
He walked over the broken glass, killed the thugs... and er... reconnected the cables*
SHOCK and AWS: The fall of Amazon's deflationary cloud
Just as Jeff Bezos did to books and CDs, Amazon's rivals are now doing to it
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
US judge: YES, cops or feds so can slurp an ENTIRE Gmail account
Crooks don't have folders labelled 'drug records', opines NY beak
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
BlackBerry: Toss the server, mate... BES is in the CLOUD now
BlackBerry Enterprise Services takes aim at SMEs - but there's a catch
The triumph of VVOL: Everyone's jumping into bed with VMware
'Bandwagon'? Yes, we're on it and so what, say big dogs
Carbon tax repeal won't see data centre operators cut prices
Rackspace says electricity isn't a major cost, Equinix promises 'no levy'
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.