J.D. Edwards Sues Oracle

The Denver-based software company said it's seeking $1.7 billion in compensatory damages in a lawsuit filed against Oracle on Thursday in Colorado state court. The suit alleges that Oracle interfered with J.D. Edwards' proposed merger with PeopleSoft, Pleasanton, Calif., a deal announced June 2. J.D. Edwards also seeks an unspecified amount in punitive damages.

J.D. Edwards also filed a suit in California state court to get an injunction that prohibits Oracle from proceeding with its June 6 tender offer for PeopleSoft. The suit alleges that Oracle Chairman and CEO Larry Ellison and Oracle Executive Vice President Chuck Phillips "have engaged in wrongful conduct and unfair business practices," according to J.D. Edwards.

"Oracle's unsolicited offer for PeopleSoft will only destroy value for our companies' shareholders, customers and employees and the technology community overall," said J.D. Edwards CEO Bob Dutkowsky in a statement. "We will not sit by idly while Oracle pursues this arrogant, unlawful and destructive course of action."

In a conference call with analysts Thursday night, PeopleSoft CEO Craig Conway said it was time for PeopleSoft to get back to work. He also said PeopleSoft's board had "exhaustively" weighed Oracle's offer and that "this process is at an end."

At the same time, in a separate conference call to report Oracle's fourth-quarter earnings, Ellison vowed to keep on fighting to take over PeopleSoft. He criticized PeopleSoft's intentions, saying that its plan "is to take the existing PeopleSoft business, which is under significant stress, and merge it with J.D. Edwards. We believe that J.D. Edwards is in even worse shape than PeopleSoft. They lost money in their most recent quarter.

"Merging a company that's down 28 percent with a company that is losing money presents a very risky proposition to shareholders," Ellison said.

Oracle's stock was trading up 3 percent Friday morning at $13.76 per share. PeopleSoft shares were down slightly at $16.98. J.D. Edwards stock also was down slightly at $13.25 per share.