Conway is being confronted by Oracle lawyers as part of a legal battle connected to the takeover bid regarding statements he made about the bid’s effects on PeopleSoft’s business. Conway has admitted that his comments, in which he stated that the takeover attempt was having little effect on his business, do not constitute lies even though they may be misleading.
In his testimony Wednesday, Conway insisted that that the controversy surrounding his statements was largely a question of semantics. He also asserted that the misleading statements were corrected the following day in a regulatory filing. Lawyers for Oracle propose that Conway’s statements amounted to securities fraud.
On a larger scale, the case brought by Oracle is meant to confront what it considers illegitimate defensive tactics to the hostile bid (See Oracle Launches Legal Attack on PeopleSoft’s Takeover Defenses ). The centerpiece of PeopleSoft’s defense was a ‘poison pill’ in the form of a Customer Assurance Plan. It was essentially a rebate that would require any acquirer to pay new customers up to five times the cost of their software license if it failed to support PeopleSoft’s software.
In a pretrial conference, Judge Leo Strine of Delaware state court expressed concern about the controversial defensive tactic’s cost, which is estimated at a potential $2 billion. The ‘poison pill’ was adopted days after the Oracle tender offer.
Conway was fired last week as the CEO of PeopleSoft because of the Board’s “loss of confidence in Mr. Conway’s ability to continue to lead the company,” (See Takeover Target PeopleSoft Announces Exec Reshuffle ).