Intel shareholder wants execs to pay $2.7B in fines
- 20 November, 2009 04:58
An Intel Corp. investor, frustrated that the chip maker has been hit with $2.7 billion in fines and settlement payments, has filed suit in U.S. District Court in Delaware against the company and its top executives.
Charles A. Gilman wants the court to force company executives, including Intel President and CEO Paul Otellini, to fork over money for the fines and payments so shareholders don't take a financial hit.
The lawsuit was filed the same week Intel reached a settlement with Advanced Micro Devices Inc. (AMD) to end all antitrust litigation between the two companies. As part of the deal, Intel agreed to pay rival AMD $1.25 billion.
That followed a ruling in May by the European Commission in which Intel was found guilty of antitrust violations in the market for PC microprocessors and fined it $1.44 billion.
Gilman, who refers to himself in court documents as a "long-time shareholder," doesn't think the company and its shareholders should suffer for Intel's actions.
In a document filed in court, Gilman's attorneys contend that shareholder attempts to influence Intel's board of directors have "proved fruitless. ...Indeed, shareholder demands have been met with outright hostility, which can only bespeak bad faith."
The document also contends that Intel's board refused to investigate the antitrust charges against the company or to appoint an independent committee to review the charges and take remedial action, if needed.
"The antagonism of Intel's Board of Directors to the shareholders' demand is readily explained by growing evidence that the antitrust scheme, which spanned three continents, and which has so far led to over $1 billion in fines, was personally directed by CEO Otellini and by Intel's former board chairman, Craig R. Barrett," the document alleges.
Ezra Gottheil, an analyst with Technology Business Research, Inc., said he's not surprised by the suit. "Someone always sues," he said, adding that he's never heard of company executives being forced to pay for any fines or settlements.
One of Gilman's attorneys, Roy Jacobs, of the firm Law Offices of Roy Jacobs in Manhattan, declined to comment on the suit. So did another Gilman attorney, Robert Goldberg, who is with Biggs and Battaglia, a Delaware law firm.
For its part, Intel promised to fight the suit. "We disagree with the plaintiff in the matter and we are planning a vigorous defense," said Chuck Mulloy, an Intel spokesman
In addition to Otellini, those named in the suit include: former CEO and ex-Chairman of the Board Barrett; directors James Plummer and Susan Decker; and former directors Carol Bartz, D. James Guzy Sr., David Pottruck, Jane Shaw, David Yoffie, Charlene Barshefsky, John Donahoe and Frank Yeary.