HP, Hewlett want to limit disclosure

Hewlett-Packard and Walter Hewlett are both asking the judge presiding over their case regarding the Compaq Computer merger to keep certain "particularly sensitive" information from public view.

In a letter to the Delaware court, an attorney for Walter Hewlett said both parties have agreed to an order that would limit the disclosure of information deemed "highly confidential" by either side.

Lawyers for Walter Hewlett also had been seeking to prevent HP executives and in-house lawyers from learning the identities of certain HP and Compaq workers who have provided information to the dissident director. Under Hewlett's proposal, HP's outside attorneys would be told the identities of those workers but would be barred from sharing that information with the company. HP had opposed that notion.

A source familiar with the proceedings told CNET News.com that the two sides have reached an arrangement that will allow HP's in-house lawyers, but not company management, to learn the identities of those providing evidence against the company.

Hewlett is suing the company his father founded, asking the Delaware Chancery Court to throw out the results of HP's March 19 shareholder vote.

HP claims it won the shareholder vote by a "slim but sufficient margin," but Hewlett has refused to concede defeat. An official tally is still being prepared by a Delaware firm. In legal papers, Hewlett claims that the margin of victory may be less than 1 percent.

In the Delaware suit, Hewlett charges that HP improperly used financial inducements to convince large shareholder Deutsche Bank to swing its vote in favor of the deal. Hewlett also contends that HP failed to disclose problems being encountered in the integration planning process.

HP denied the charges and asked a Delaware judge to throw out the case, but Chancellor William Chandler III granted Hewlett a trial, which is set to begin April 23.

Walter Hewlett's lawyers claim they have gotten unsolicited information from HP and Compaq workers that supports their contention that HP knew its integration planning was not going as well as it was publicly projecting.

"While HP has suggested that those who disagree with management's public statements are lower-level employees, and limited in number, we strongly believe that the evidence will show that concern about the key financial numbers was widespread and pervasive," Hewlett lawyer Lawrence Ashby said in a letter to the court Thursday.