As Oracle awaits the resumption of its court battle with takeover target PeopleSoft two of the software giant’s top executives have won a vital–if more personal–legal wrangle.
Oracle Chief Executive Lawrence Ellison and Chairman Jeff Henley had faced a shareholder’s lawsuit, accusing them of insider trading in 2001. The suit said the C-level duo jettisoned Oracle shares in advance of skidding results in that year. But Vice Chancellor Leo Strine of Delaware’s Court of Chancery ruled that there was no evidence to indicate that Ellison or Henley knew the firm’s profit was headed down when they sold the stock. Strine granted the execs summary judgment in the case.
With that bit of nasty business out of the way, the CEO and chairman can focus on preparing for December, when their own acquisition lawsuit resumes. Ellison and Henley will see a familiar face in court: Strine is the same judge who is presiding over the takeover battle.
Oracle Corp. chief executive Lawrence Ellison and board chairman Jeff Henley have won a summary decision in a lawsuit that accused them of insider trading in 2001.
The decision was issued Wednesday by the same Delaware judge who is presiding over the continuing legal battle in Oracle’s attempt to take over rival PeopleSoft Inc.
Vice Chancellor Leo Strine of Delaware’s Court of Chancery found no evidence that Ellison and Henley dumped Oracle stock in advance of sliding results in 2001, and granted the two top executives summary judgment in the case.
Brought by a shareholder on behalf of Oracle to recover alleged insider profits, the 2001 case survived an earlier effort to block it when the Delaware Chancery Court found a special committee of the Oracle board lacked independence.
Wednesday’s ruling, however, concluded there was no evidence showing either Ellison or Henley knew Oracle’s profits were headed down when they sold stock in January 2001.
Strine, who will hear more evidence in Oracle’s lawsuit against PeopleSoft’s takeover defenses in December, noted in the shareholder case that the final week of a fiscal quarter is the definitive one for software companies.
PeopleSoft tried unsuccessfully last week to win a delay in the Oracle lawsuit, so it would be free to close fourth-quarter deals without the uncertainty of continued legal action.
In the decision on the 2001 case, Strine also noted the importance of software licensing to Oracle’s profits.
For more than 17 months, Oracle has been attempting to bolster that licensing business by acquiring PeopleSoft.