Fate of HP-Compaq Merger Now Rests With Delaware Judge

Judge Chandler told both HP and attorneys for Walter Hewlett that he would accept additional briefs until midnight Friday and promised to decide the case as soon as possible thereafter. Either side can appeal the decision to the Delaware Supreme Court. HP CEO Carly Fiorina said May 7 will be the launch date for the new company, barring further legal roadblocks.

Dissident HP director Hewlett is seeking to overturn the March 19 proxy vote and block HP's merger with Compaq. Preliminary results show HP shareholders approved the merger by about 45 million votes. An official proxy voting result is expected within a few days.

The final witness in the three-day trial, Boeing Chairman and CEO Phil Condit, rebutted Hewlett's attorneys, who argued that Value Capture (VC) revenue estimates put forth by business-unit executives for the merged company are significantly lower than revenue forecasts in HP's Dec. 19 proxy and therefore should have been disclosed to shareholders.

"I've never seen business-unit numbers come in excessively high; they are always low," said Condit, who is also an HP board member. Hewlett testified earlier that in his 15 years on the HP board, business-unit revenue projections always came in aggressive, and the board "had to give them a haircut."

But Condit, who has been on HP's board for four years, said, "I've never in my career seen that happen--not once."

The value of those VC numbers was the essence of the Hewlett case. Hewlett attorneys argued that business-unit executives were submitting revenue estimates for their respective groups that were significantly lower than revenue numbers disclosed in HP's Dec. 19 proxy statement to shareholders.

They charged that HP management withheld the numbers in order to win shareholder approval for the merger with Compaq.