Litigation is of course now part of the circadian rhythm of corporate scandale, and so, with the predictability of swallows to Capistrano, the returning tide to a Bay, or flies on rotting meat, the HP saga has produced its first class action:
The lead partner at Lerach Coughlin Stoia Geller Rudman & Robbins argues in the suit that 10 HP board members and executives — including Dunn and General Counsel Ann Baskins — should be forced to pay damages to the company.
Lerach wrote that the defendants “breached their fiduciary duties to HP, committed gross mismanagement, abused their control of HP, and have engaged in a gross dereliction of their duties, as well as corporate waste and attempted enrichment” by seeking to solidify their positions within the company by investigating board members Thomas Perkins and George Keyworth.
Intriguingly:
One part of the mess Lerach says is particularly troubling is the board’s ongoing reliance on GC Baskins and Sonsini, who Lerach says advised the firm on the leak probe, the subsequent investigation of that probe, and recent board meetings discussing how to deal with the aftermath.
“Throughout the investigation, the controversy surrounding this investigation, HP’s SEC disclosures regarding this investigation and its aftermath, the HP board has continued to rely upon the advice and counsel of Baskins, the in-house general counsel of HP, despite the fact that she was personally involved in structuring and implementing the investigation which utilized illegal tactics,” the complaint says.
and finally, humourously:
Lerach said Thursday that state derivative cases tend to move slowly, and he’s not yet sure who is representing HP in the case.
“I bet you it won’t be Wilson Sonsini,” he said.
Why not a suit also against Wilson Sonsini, then?
Notes the NYT:
Mr. Lerach typically files suit against troubled companies seeking damages because the price of the stock has fallen. But in this instance, Hewlett-Packard’s stock has scarcely been affected.
Indeed. Obviously, because it’s generally only in such cases that the damages can be high enough to attract attention to the contingency fees they might attract in a class action. More as the story develops.