Hewlett v. Hewlett-Packard Co.

Facts

In the spring of 2001, HP began to consider the prospect of acquiring and merging with Compaq. The merger was announced publicly on September 4 and HP made its first public statements about the financial effects of the merger. On November 6, 2001, Hewlett publicly announced his opposition to the merger. In early March, Hewlett and HP were actively engaged in the proxy contest and each was trying to secure as many vote as possible. The plaintiffs allege that HP improperly enticed or coerced Deutsche Bank to vote in favor of the merger by using the carrot of potential future business. Voting decisions for shares held by the Deutsche Bank management are made by a five-member committee known as the Proxy Working Group. For much of the proxy contest, HP management and Hewlett’s advisors believed that the Deutsche Bank management would follow its common practice and vote its shares. Following the special meeting, HP management publicly claimed that the HP shareholders had approved the proposed merger by a slim but sufficient margin. The lawsuit was filed on March 28, 2002.