Full Court Press: Hewlett-Packard

Fiorina insisted she did not misrepresent revenue and earnings projections for the combined company to win shareholder approval. "You are accusing the CEO of a publicly traded company of lying," said a frustrated Fiorina at one point during her nearly seven hours on the stand.

The courtroom showdown involving Fiorina came during a three-day trial in a lawsuit brought by HP dissident board member Walter Hewlett.

Hewlett is attempting to overturn a March 19 proxy vote in which HP shareholders approved the vendor's $21.4 billion merger with Compaq Computer by a slim 2.8 percent.

The fate of the merger is now in the hands of Delaware Chancery Judge William Chandler III, whose ruling is expected within days.

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Hewlett's attorney, Stephen Neal, attempted to prove HP management misrepresented the prospects for the merger. He said that in HP's Dec. 19, 2001, proxy statement, the company projected 2003 revenue of $80.9 billion, but by mid-March, that figure had dropped to $77.4 billion. "That clearly means the economy was deteriorating," Fiorina responded.

Neal sought to show that the value capture (VC) reports HP management was getting from business-unit planners differed from its initial public disclosure. But Fiorina said, "These documents are not forecasts; they are planning documents." She said business-unit executives lack key data on which to base their VC reports, such as product road maps and procurement cost savings that are privy only to members of the merger "clean room."

Chandler's decision is likely to hinge on whether he believes preliminary planning numbers equate to long-term financial forecasts.

As Neal pressed forward, noting he was "only asking questions," an agitated Fiorina responded, "We've not been able to bring whole management teams together thanks to this lawsuit."

HP and Compaq executives who testified said they discounted VC forecast numbers because such figures are always low.

"I've never seen business-unit numbers come in excessively high; they are always low," said HP board member Phil Condit, chairman and CEO of Boeing, the final witness at the trial.

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, regarding Hewlett's comments, "I've never in my career seen that happen, not once."

Meanwhile, solution providers said the courtroom battle is making it tougher for them to sell HP and Compaq solutions.

"This pulls the rug out [from under the thinking that this will be a quick and easy merger if it goes through," said Todd Barrett, networking sales manager at CPU Sales and Service, a solution provider in Needham, Mass. "All this mess extends the question of when and if this [merger is going to happen. . . . It makes it tougher to get IBM and Dell [Computer shops to move in the HP-Compaq direction."