Hewlett Trial Ends

The lawyers for dissident Hewlett-Packard board member Walter Hewlett finished their case against the company Thursday in a Delaware Chancery Court.

Judge William B. Chandler III is expected to issue his ruling at any time.

“I will get you one very quickly,” Chandler said.

Hewlett and HP said they would file post-trial briefs with the judge before 9 p.m. PT on Friday.

Hewlett’s lawsuit filed on March 28, stems from claims that HP management used strong-arm techniques and intimidation to sway shareholders to vote for its pending $19 billion merger with Compaq Computer .

The three-day trial was set up to determine if any wrongdoing had occurred and if the affected shares should be removed from the final vote tally or if there should be a recount.

Hewlett’s attorney Stephen Neal repeatedly questioned H-P and Compaq execs about revenue losses and missed targets that the prosecution said was being withheld.
Steve Neal, a lawyer for Mr. Hewlett, also quoted from internal message traffic between Deutsche Bank officials.

One message for Deutsche Bank Asset Management’s New York chief investment officer Dean Barr addressed the bank’s proxy team that controlled the vote.

“This is extremely sensitive,” the message read “I’m not trying to put pressure on you,” but be sure you can find a way to back up your decision on this.”

Another e-mail from a German representative to Mr. Barr the day before the vote said, “I don’t want to be smarter than the people in New York; if it’s better for our customer for us to change our vote, then let me see what I can overcome.”

The March 19 proxy vote ended with HP claiming initial success and later confirming the win through a preliminary estimate from an independent auditing firm.

The vote tally, prepared by IVS Associates showed that HP shareowners voted in favor of the merger by a margin of approximately 45 million shares.

Company CEO Carly Fiorina was questioned several times about her involvement in influencing Deutsche Bank’s Deutsche Asset Management arm over its 20 million votes – 1.3 percent of HP stock.

Internal documents from Compaq CEO Michael Capellas and HP CFO Robert Wayman were also scrutinized.

The San Francisco office of the Securities and Exchange Commission and the U.S. Attorney’s Office for the Southern District of New York are currently reviewing the case to see if any federal laws were broken.

More details to follow.

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