zdnet.com.com/2100-1103-895715.html
Delaware Chancery Court Judge William Chandler III ruled in favor of HP on all claims and dismissed Hewlett's suit, which had sought to overturn the results of HP's March 19 shareholder vote. The decision is a huge setback for former director Walter Hewlett, who has led the charge against the $19 billion Compaq acquisition during a six-month proxy fight and recent court battle. In his lawsuit, Walter Hewlett had alleged the vote was tainted. Hewlett had two main charges: The company failed to disclose that its integration planning was going more poorly than it had hoped and that it essentially bought the vote of Deutsche Bank, a large shareholder. A three-day trial revealed there were doubts among some HP workers that the company's financial goals were achievable. It also showed that Deutsche Bank's proxy committee was under pressure from its corporate staff. But many trial watchers said Hewlett lacked the smoking gun that would prove his allegations. In the 44-page ruling, Chandler systematically ruled against Hewlett's arguments. The "plaintiffs have failed to prove that HP disseminated materially false information about its integration efforts or about the financial data provided to its shareholders," Chandler wrote. Hewlett has the option of appealing to the Delaware Supreme Court, although a representative said Hewlett has not yet decided whether to do so. Hewlett also vowed to remain involved in the company his father founded even though he is no longer on the board--management decided not to renominate him in the wake of the lawsuit. Attorney's Office for the Southern District of New York have also requested information regarding HP's relationship with Deutsche Bank and Northern Trust, and HP's solicitation of their merger proxies. Both agencies declined to comment on what effect, if any, the Delaware Court's ruling would have on their respective cases. Despite the victory, HP did not come off looking good during the trial, said Charles Elson, professor of corporate governance at the University of Delaware. Elson said the judge's ruling is not a vindication of HP, but rather a declaration that Hewlett's evidence did not merit the court's intervention.
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