Judge William B. Chandler has yet to rule on the fate of the Hewlett Packard Co./Compaq Computer Corp. merger, but the two sides continue jockeying for position in the hearing that ended last week.
Over the weekend, lawyers for HP released a final brief in which they asked Chandler to force Walter Hewlett to end his fight against the merger and clear the names of HP CEO and Chairwoman Carly Fiorina and Chief Financial Officer Robert Wayman.
As a result, Hewlett's side today agreed to release its final brief even though the document was originally filed under seal. Chandler had given both sides until midnight last Friday to file closing briefs in the trial; the public portion ended Thursday afternoon.
Hewlett spokesman Todd Glass said that the former HP director would have no comments on claims made by HP's attorneys that he had tarnished Fiorina and Wayman's names and that he refused to let go of the truth. HP's lawyers didn't return telephone calls seeking comment.
In the meantime, according to news reports, a tired Fiorina oversaw the annual meeting for shareholders in Flint Center in Cupertino, Calif., on Friday. It was at that low-key meeting that Hewlett was removed from the company's board of directors.
The new lineup of directors was approved by a vote of 1.4 billion to 184.9 million, and it marked the first time neither the Hewlett or Packard families were represented on the board. In addition to Fiorina and Wayman, the board includes: Philip M. Condit, chairman and CEO of the Boeing Co.; Patricia C. Dunn, co-chairwoman at Barclay's Global Investors; Richard A. Hackborn, a former HP chairman and executive vice president; George A. Keyworth II, chairman of the Progress & Freedom Foundation; and Robert E. Knowling Jr., chairman and CEO of Internet Access Technologies Inc.
All eight were members of the board prior to the vote, and the only change was Hewlett's removal. Five additional members will be added to the board if the Compaq merger is approved.
The merger has already won tentative approval from shareholders but must survive Hewlett's legal challenge. Given the nature of what his ruling may mean to the company, Chandler said he would try to render a decision as soon as possible.
However, in addition to studying testimony given in court, the judge also has to look over transcripts of phone calls between Fiorina, Wayman and representatives of Frankfurt-based Deutsche Bank AG., as well as depositions taken by both sides in the weeks leading up to the trial.
Many of the lawyers and analysts who viewed the case said they believe that Chandler will side with HP. However, a handful believe that the vote should be overturned simply based on HP's relationship with Deutsche Bank. The bank had solicited HP's business and asked to represent it to shareholders in the proxy battle with Hewlett. Despite this arrangement, the bank was allegedly ready to vote against the merger until a last-minute phone call from Fiorina convinced them to change their minds. Hewlett was also given a chance to make one final pitch to the bank, too.
Even if Chandler rules for HP, that won't end the legal troubles that have emerged from the controversial challenge by Hewlett, son of one of the company's founders. The U.S. attorney's office for the southern district of New York and the Securities and Exchange Commission are looking into the merger as well.