Ohio business owners may be interested in the latest news on a lawsuit filed by shareholders against tech giant Hewlett-Packard. The claim against the company has been dismissed despite the shareholders’ second chance at filing.
In August 2013, a group of HP shareholders led by a New York-based retirement fund filed a lawsuit against the tech company in a northern California federal court. They alleged that the actions of HP’s former CEO were a breach of the company’s Standards of Business Conduct, which dictated their commitment to ethical business practices. However, the federal judge dismissed the case without prejudice, instructing the shareholders to refile with a more specific claim. On June 25, the shareholders’ claims were dismissed once again. This time, though the complaint contained more specific facts, the judge found that they did not rise to the level of securities fraud.
The complaint stemmed from sexual harassment allegations made by one of the company’s consultants against HP’s former CEO. The CEO left his position before an internal investigation by the company found that he had not harassed her; however, they did find that he had filed inaccurate reports of expenses during his time as CEO. The shareholders believed that their trust in the company’s business ethics standards led the stock price to artificially rise even while the executive was not living up to them. This was not enough for the federal judge in charge of the case. He held that this failure to comply with their stated business ethics was not material insofar as securities violations go.
When shareholder disputes rise to the level of litigation, an attorney may be able to assist the business. The attorney may be able to successfully represent the company in court or negotiate with the shareholders to reach a fair settlement.
Source: Reuters, “ HP wins dismissal of lawsuit linked to ex-CEO Hurd’s ouster“, Jonathan Stempel, June 26, 2014