Original URL: http://www.theregister.co.uk/2002/04/09/walter_hewlett_wins_his_day/

Walter Hewlett wins his day in court

Claims sufficient to merit trial, says judge

By John Lettice

Posted in Business, 9th April 2002 10:30 GMT

Walter Hewlett is to have his day in court, following a judge's decision that his claims of merger skullduggery have sufficient merit for the matter to go to trial. Dissident shareholder and (soon to be former) HP director Hewlett is still trying to block the sircam HP-Compaq merger, claiming that HP management resorted to vote-buying and lies in order to win the vote.

Specifically, Walter says HP leaned on Deutsche Bank, which holds just over 1 per cent of HP stock (possibly enough to tip the balance), to vote in favour of the merger in order to avoid losing future business. He also claims that HP won proxy votes by issuing misleading statements about the integration of the two businesses, and has been making it up as regards cost savings, savings from job cuts and reduction in losses.

The first one sounds pretty difficult to make stick, as indeed Judge William B Chandler III points out in his decision, but considering that the belief that the sircam merger is deranged is pretty widespread, the second might be hard not to prove.

Judge Chandler points out that Delaware law does not allow a participant in a proxy contest to lie and then obtain protection by "describing the lie as a forward-looking statement." Being somewhat rusty as regards Delware law, The Register is unable to say whether that means that lies in, say, run-of-the-mill press preleases can obtain shelter as forward-looking statements; probably not, so the stuff we have to deal with must count as obfuscations at worst. ®

Related stories:
HP board blackballs Walter