Shareholders file suit against HP over Hurd's exit

/ Source: The Associated Press

Shareholders of Hewlett-Packard Co. have filed a "derivative lawsuit" against the technology company and its board over former CEO 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 in California Tuesday on behalf of shareholders by Brockton Contributory Retirement System against Hurd, Interim CEO and Chief Financial Officer Catherine Lesjak and HP's other board members.

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The suit claims HP lost "significant credibility" due to the controversy that erased more than $9 billion in market capitalization when HP's shares started trading on Monday following 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 last Friday 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.

The Palo Alto, Calif., company said it sexual harassment policy was not violated, and both Hurd and the contractor, Jodie Fisher, said they have not had sexual relations.

HP declined to comment on the lawsuit.