Oracle Chairman Larry Ellison Can Win Lawsuit Even If He Loses
Oracle Corp. Chairman Larry Ellison is slated to testify in a lawsuit in which a loss could still result in a windfall for the company he co-founded and holds a 40% stake in.
The investor suit, brought in a Delaware court by a pension fund, accuses the 8th-richest American and others at Oracle of overpaying by $3 billion for rival software maker NetSuite Inc. in 2016. Ellison owned 47% of NetSuite at the time of the $9.3 billion deal and held about 28% of Oracle's shares.
The Firemen's Retirement System of St. Louis, an Oracle investor, sued Ellison and the company's board in 2017 to challenge the acquisition. The case, known as a derivative suit, was brought on behalf of the company, so any money recovered will be returned to Oracle. The company didn't respond to an email and phone call seeking comment on the case.
A win by the shareholders could force changes to management or the board, or result in an award that would boost the value of the company. As a significant shareholder, Ellison would benefit from any increased value in the company, but that might be offset by any amount he'd be forced to pay -- although payouts are often covered by insurance, said Eric Talley, a professor at Columbia Law School who specializes in corporate and transactional law.
The trial in Delaware Chancery Court got under way last week, and Ellison may appear -- likely via videolink -- on Wednesday. Getting an executive of Ellison's stature on the stand in a shareholder lawsuit trial is fairly unusual, but not unique. Tesla Inc. founder Elon Musk -- a friend of Ellison's -- spent two days in a Delaware court last year testifying to defend his takeover of SolarCity, which shareholders claimed he pushed for his own benefit rather than
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