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Larry Ellison, CEO of Oracle Corp.  (Source: AP)

Mark Hurd, former CEO of Hewlett-Packard Company, new Co-President at Oracle Corp.  (Source: AP)
Oracle CEO responds to suit against new Oracle Co-President Mark Hurd

It's been a wild ride for former Hewlett-Packard CEO Mark Hurd.  Under Mr. Hurd's savvy leadership HP leapt from second place in the personal computer industry to beat Dell and become the world's largest computer manufacturer.  Then Mr. Hurd was slapped with a shocking sexual harassment suit from a former contractor.  Forced to resign, Mr. Hurd has now been granted a Co-President position at Oracle Corporation.

But the ride is far from over.  HP has filed suit [Scribd] against Mark Hurd, seeking to block him from assuming his role at Oracle.

The suit claims that by working at Oracle Mr. Hurd is violating confidentiality agreements that were part of a severance package he received when agreeing to resign.  On its corporate blog, the company's legal team writes, "Mark Hurd agreed to and signed agreements designed to protect HP's trade secrets and confidential information. HP intends to enforce those agreements."

Unfortunately for HP, Mr. Hurd did not sign a non-compete agreement when resigning.  Thus the company may lack the legal firepower to stop him from working at Oracle.  And even a non-compete isn't always sufficient to bring a swift outcome as highlighted by IBM's recent suit against Apple-hire Mark Papermaster, a drawn out case that was eventually settled out of court.

To top it off, HP gave Mark Hurd $40M USD in severance money.  Thus the company now finds itself in the awkward position of trying to combat Mr. Hurd's legal team, which it essentially funded.

Oracle CEO Larry Ellison, a close friend of Mark Hurd's since the days when Mr. Hurd was President and Chief Operating Officer of NCR, is by no means keeping quiet about the case.  He unleashed a sharply worded tirade against HP, saying that he may cut ties with it if the suit continues.

He comments:

Oracle has long viewed HP as an important partner.  By filing this vindictive lawsuit against Oracle and Mark Hurd, the HP board is acting with utter disregard for that partnership, our joint customers, and their own shareholders and employees.   The HP Board is making it virtually impossible for Oracle and HP to continue to cooperate and work together in the IT marketplace.

That hard stance could wind up hurting Oracle's bottom line as HP is a key business partner.  However, it will likely hurt HP even more, given the fact that it's struggling under the loss of several key executives, including Mr. Hurd.

Oracle is the world's third largest software maker, behind only Microsoft and IBM.  In 2009 it acquired Sun Microsystems, the crown jewel of a $30B USD campaign of acquisitions.

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RE: Happened Quickly
By nolisi on 9/8/2010 3:33:07 PM , Rating: 2
HP's stock being down indicates that the shareholders placed more value in Hurd's money making ability as a CEO than his alleged ethics violations.

Not necessarily. HP's stock dive could be simply a response to negative news, rather than anything that Hurd specifically did. Especially given how shakey HP's leadership in general has been in recent years.

Oracle's increase could be due to the fact that it did get a competitors CEO, with all the experience and insight into the HP strategy that his previous position brings.

And the case settlement may have been due to the fact that fighting the case may have ultimately been more costly than the settlement. Or, he may have been fighting a case that he couldn't win given the evidence and forced to pay out damages as well as legal fees.

There are certainly a lot of possibilities, and you can't necessarily make a solid determination on *exactly* why stock prices went up or down, or why someone settled instead of fought unless you sit down on an individual basis and ask.

"We’re Apple. We don’t wear suits. We don’t even own suits." -- Apple CEO Steve Jobs

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