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HP shareholders file suit over CEO's exit

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Saturday, August 14, 2010

LEGAL

HP shareholders file suit over CEO's exit

Shareholders of Hewlett-Packard have filed a "derivative lawsuit" against the technology company and its board over former chief executive Mark Hurd's abrupt resignation last week.

A derivative lawsuit lets shareholders sue executives or board members over claims that their actions harmed the company as a whole.

The lawsuit seeks unspecified damages and changes to HP's corporate governance.

It was filed in California Superior Court Tuesday on behalf of shareholders by Brockton Contributory Retirement System against Hurd; Catherine Lesjak, interim CEO and chief financial officer; and HP's other board members.

The suit claims HP lost "significant credibility" because of the controversy, which erased more than $9 billion in market capitalization when HP's shares started trading Monday after the resignation.

It also says that Hurd's severance package, which could top $40 million, could have been "dramatically limited" by HP's board by firing him for cause.

Hurd resigned Aug. 6 after an investigation into a sexual harassment claim found that he falsified expense reports covering meetings with a female events contractor. Hurd has settled separately with the woman.

HP declined to comment on the lawsuit.


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