HP Compaq merger enters court

The fate of the Hewlett-Packard Compaq merger could soon be settled after a US court said it would decide whether or not to throw out a lawsuit brought by dissident HP board member, Walter Hewlett.

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By  Neil Denslow Published  April 8, 2002

The fate of the Hewlett-Packard Compaq merger could soon be settled after a US court said it would decide whether or not to throw out a lawsuit brought by dissident HP board member, Walter Hewlett.

Hewlett’s suit, filed in the Delaware Chancery Court at the end of March, argues that HP effectively bribed Deutsche Bank into supporting the deal through the promise of business. It also alleges that HP misled shareholders over the progress of merger planning.

HP has responded by asking the court to dismiss the suit as groundless. Chancellor William Chandler III considered the motion to dismiss on Sunday in hearing that lasted about two and half hours, according to HP spokeswoman Judy Radlinsky.

“HP is pleased that the chancellor listened carefully to our argument and we look forward to his decision. We continue to believe the allegations are without merit and we remain confident that we will prevail,” she says.

The lawsuit is set to go to trial on April 23. The companies are also still waiting for the result of the March 19 shareholder votes, which management believe they won.

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