Ending a month-long corporate soap opera embroiling two of the world's
largest technology companies, Hewlett-Packard has settled its lawsuit
with its former CEO Mark Hurd. The agreement paves the way for Hurd to
start anew at Oracle as co-president—a move HP tried to block fearing
Hurd would divulge a trove of trade secrets to Oracle. While it's
practically impossible to ensure Hurd won't open his mouth at his new
home, HP is apparently satisfied with the settlement.
Thus, "Hurdgate"—a tale of revenge, sexual indiscretion, sloppy accounting and backroom dealings—draws to a close. Here's where the story's characters leave off and how the agreement came to be.
- HP's Lawsuit Was Weak, writes Ben Worthen at The Wall Street Journal: "H-P argued Mr. Hurd was so involved in every aspect of its business he would inevitably violate his confidentially agreement by working at Oracle. It is generally difficult to prevent someone from working at a competitor in California, where both H-P and Oracle are based. Mr. Hurd's exit agreement didn't have a noncompete agreement. Employment lawyers said H-P faced an uphill battle in court. Indeed, H-P didn't pursue an injunction that would have prevented Mr. Hurd from starting work at Oracle."
- Marc Andreessen Secured the Settlement, writes Kara Swisher at All Things Digital: "According to multiple sources, Oracle CEO Larry Ellison approached Hewlett-Packard board member Marc Andreessen to help broker a settlement between the companies... The often obstreperous tech billionaire approached Andreessen to make peace, after a lot of public razzing of HP. Andreessen is a more recent addition to the HP board and has become a Silicon Valley statesman of a sort since his earlier days as its resident bad-boy wunderkind. In addition, regulatory filings show that former HP CEO Mark Hurd, whom the board was suing for moving to a job a Oracle (ORCL) after a controversial departure, returned stock to the company, in exchange for the settlement announced earlier today."
- The Dispute Took Its Toll on the Companies, write Ashlee Vance and Verne Kopytoff at The New York Times: "Although most legal analysts said H.P. had had little chance of winning its case, the lawsuit immediately strained the business relationship between the two companies. Oracle and H.P. have a long history of selling technology together. About 40 percent of Oracle’s business software runs on computing systems sold by H.P., and the companies have 140,000 customers in common. After the lawsuit was filed — 19 hours after Oracle hired Mr. Hurd — Lawrence J. Ellison, Oracle’s chief executive, warned that H.P.’s actions threatened to derail the companies’ longstanding partnership."
- 'Joining Oracle Cost Hurd $13.6M. Losing Hurd Cost HP $15.7 Billion,' observes Alexia Tsotsis at TechCrunch: "By making the move to competitor Oracle, Hurd gave up options on 346K shares of HP stock which at today’s closing price of $39.39 means $13.6M in losses. HP is currently selling at $39.39 which marks a steep dip from the day Hurd was fired; On August 6th, 2010 HP’s stock price closed at $46.30, a $6.91 difference. If you multiply that by the 2.27B shares outstanding it means a $15.68B Hurd-related market cap drop for HP."
- The Settlement Was Good for Everyone, writes Jordan Robertson at the Associated Press: "The deal lets HP save face over the handling of Hurd's ouster. It also removes the specter of a long court battle over whether Hurd, with his trove of secrets about HP, could be barred from working at Oracle as a co-president, reporting to Oracle's CEO Larry Ellison."