Hewlett v. Hewlett-Packard Co.
Delaware Court of Chancery
2002 WL 549137 (2002)
In 2001, Hewlett-Packard Co. (HP) (defendant) entered into a merger agreement with Compaq Computer Corporation (Compaq). The proposed merger would include issuing new HP shares to former Compaq shareholders, which would dilute HP shareholders’ ownership percentage in the combined entity. The value of HP’s publicly traded stock quickly and materially dropped upon announcement of the merger proposal. Majority approval of HP’s stockholders was required for the merger. Various members of the Hewlett family and others (the Hewlett parties) (plaintiffs) announced they opposed the merger, and a proxy contest ensued. A vote of HP’s stockholders took place at an HP stockholders’ meeting, and requisite approval was received in a close vote. Deutsche Bank (DB) had held proxies to vote approximately 25 million HP shares at the meeting. Days prior to the stockholders meeting, DB allegedly cast all 25 million proxies against the merger. At the shareholder meeting, however, DB changed 17 million of those proxy votes to be in favor of the merger. The Hewlett parties claimed that DB’s vote change had resulted from unlawful vote-buying by HP management. The day prior to the vote, HP management allegedly caused DB concern it would lose future business if DB voted against management’s position. Further, HP management allegedly had a coercive telephone discussion with DB on the day of the shareholders meeting, which culminated in DB’s vote change. Moreover, HP allegedly made public statements regarding the status of the integration plan of the companies as well as projected financial results that were knowingly and materially false. The Hewlett parties alleged that such false statements had resulted in Barclays Global Investors (Barclays) voting 60 million shares of HP in favor of the merger and changed the outcome of the merger vote. The Hewlett parties brought an action under § 225(b) of the Delaware General Corporation Law (DGCL) seeking declaration that the merger approval was not valid because of the vote-buying and false-disclosure claims. HP filed a motion to dismiss the complaint.
Rule of Law
Holding and Reasoning (Chandler, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 705,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.Unlock this case briefRead our student testimonials
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.Learn about our approachRead more about Quimbee
Here's why 705,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 44,400 briefs, keyed to 983 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.