Bloomberg News

Hewlett-Packard Covington Report Remains Secret, Judges Say

November 23, 2011

(Updates with excerpt from ruling in third paragraph.)

Nov. 22 (Bloomberg) -- Hewlett-Packard Co. won a court ruling that prevents an internal report on the departure of former Chief Executive Officer Mark Hurd from being made public, as an investor requested.

The Delaware Supreme Court yesterday affirmed a decision by Delaware Chancery Court Judge Donald Parsons Jr. that the “interim” report by lawyers at Covington & Burling to the board shouldn’t be among books and records sought by stockholder Ernesto Espinoza.

“Espinoza has not shown that the Covington report is essential to his stated purpose, which is to investigate possible corporate wrongdoing,” Justice Jack Jacobs wrote in behalf of the court.

Felipe Arroyo, a lawyer for Espinoza, told the justices in arguments on Oct. 12 in Dover that release of all documents would provide “a full opportunity to air out” all background details of Hurd’s departure from HP.

Hurd, who is now president of software maker Oracle Corp., resigned from Palo Alto, California-based HP in August 2010 after a company investigation determined he violated its standards of business conduct. HP said it didn’t find that Hurd had violated the company’s sexual-harassment policy.

Severance Payments

“The board did not terminate Hurd ‘for cause,’” the justices said in the ruling. “Instead, the board approved a separation agreement under which Hurd received, among other benefits, severance payments estimated as worth over $30 million.”

Hurd separately is trying to keep secret a letter from Gloria Allred, the lawyer for contractor Jodie Fisher. The letter contains allegations of sexual harassment against Hurd, Parsons said in a March decision.

Mylene Mangalindan, a Hewlett-Packard spokeswoman, didn’t immediately return phone and e-mail messages seeking comment on the ruling.

The Chancery case is Espinoza v. Hewlett-Packard Co., CA6000, Delaware Chancery Court (Wilmington). The appeal is Hurd v. Spinoza, 208, 2011, Delaware Supreme Court (Dover).

--With assistance from Dawn McCarty in Wilmington, Delaware. Editors: Stephen Farr, Mary Romano

To contact the reporter on this story: Phil Milford in Wilmington, Delaware, at pmilford@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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