Ellison gives up USD575 million payout to settle suit over Pillar buyout
Oracle Corp's founder Larry Ellison would give up a USD575 million payout in settling investors' claims that they were cheated out on a buyout deal. The deal in question was the acquisition of Pillar Data Systems Inc by Oracle.
Ellison, who is the software company's chief executive officer and one of the company directors, would be handing over almost the entire "earn out" payment resulting from the buyout deal. According to filings to the Delaware Chancery Court, Ellison has a 55% stake in Pillar and was poised to earn up to USD75 million based on the performance of the data-storage systems provider.
Oracle investors, which are pension funds based in Pennsylvania and Michigan, challenged the buyout of Pillar in a Delaware court. Lawyers of the investors said, "After weighing the costs and uncertainties of continued litigation against the benefits of the settlement, plaintiffs have determined it's in the best interests of Oracle and its stockholders (to settle lawsuits over the deal)."
Oracle bought Pillar in June 2011 on the condition that no up-front compensation would be paid. The deal would also allow an earn-out payment in the next three years that would be based on Pillar's performance, a filing with the US Securities and Exchange Commission read.