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California and the West

Judge OKs Oracle Chief's Settlement

Larry Ellison will give $100 million to charity and pay lawyers who sued him $22 million.

November 23, 2005|From Associated Press

A California judge Tuesday approved an unusual legal settlement that will require Oracle Corp. Chief Executive Larry Ellison to donate $100 million to charity and pay an additional $22 million to the attorneys who sued him for alleged stock trading abuses -- forcing Ellison to dig deeper into his pockets than he originally wanted.

Barring an appeal, the settlement finalized by San Mateo County Superior Court Judge John Schwartz closes the books on a shareholder lawsuit filed nearly four years ago on behalf of Oracle, one of the world's largest software makers.

The civil complaint revolves around a $900-million gain that Ellison generated by selling some of his Oracle stock shortly before the company's shares plummeted in 2001.

Like many other high-tech companies, Oracle's sales sagged badly that year amid the aftershocks of the dot-com implosion that wiped out hundreds of companies. Oracle's shares plunged by 52% in 2001, wiping out about $85 billion in shareholder wealth.

Although he denied any wrongdoing, Ellison tentatively agreed to settle the suit in September by donating $100 million to charity in Oracle's name.

At that time, Ellison -- one of the world's wealthiest men with an estimated $17-billion fortune -- refused to pay the lawyers who accused him of wrongdoing. He wanted to leave that responsibility to Oracle, the Redwood Shores, Calif.-based company he co-founded 28 years ago.

But Schwartz didn't want to saddle Oracle's shareholders with Ellison's legal bills. He refused to approve the settlement at a September hearing, forcing the two sides to renegotiate or take the case to trial.

Oracle's shares fell 5 cents to $12.39.

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