WILMINGTON, Del. — A Delaware state court judge will need more time before deciding whether to throw out a lawsuit filed by dissident Hewlett-Packard Co. director Walter Hewlett that could put a halt to its merger with Compaq Computer Corp.
In an unusual Sunday morning hearing, Chancellor William B. Chandler III heard more than two hours of arguments from lawyers for HP and Hewlett.
Nearly 100 people, including arbitrageurs and law professors, were in the courtroom to hear HP's motion to dismiss the lawsuit before it moves to discovery and trial.
If Chandler doesn't dismiss the lawsuit, a non-jury trial will start April 23. Chandler didn't give a timeframe for his decision, but said he would do it as quickly as possible.
A son of HP's co-founder, Hewlett has fought a high-profile battle against the deal since the $18.6 billion merger was announced in September. The suit, filed March 28, claims HP improperly enticed a big investor to back the deal and the company misled investors about the progress of plans to integrate the two computer giants.
Votes continue to be counted after five months of debate between Hewlett and merger supporters. HP chief executive Carly Fiorina claimed a small but sufficient margin shortly after the end of a shareholder meeting on the merger. According to papers filed by Hewlett, the winning margin is less than 1 percent of the nearly 2 billion shares voted.
Steven M. Schatz, a lawyer for HP, said the results should be certified within 10 to 12 days.
Neither Hewlett nor Fiorina were at Sunday's hearing.
Hewlett claimed that HP's management illegally bought votes from shareholder Deutsche Bank just days before the shareholder vote by closing on a multibillion dollar line of credit in which the bank participated. Hewlett claimed that the bank, which owns slightly more than 1 percent of HP's outstanding shares, decided to vote 17 million of its shares in favor of the merger at the last minute to avoid jeopardizing its future business dealings with HP.
"The company put the arm on Deutsche Bank," Hewlett's lawyer, Lawrence C. Ashby, told the court.
Lawyers for HP argued that Hewlett's lawsuit is a "last gasp attempt by the apparent loser of a proxy battle to obtain from the court what he could apparently not win at the ballot box."