Hewlett-Packard Settles Compaq Suit

Hewlett-Packard Co. agreed to pay $28.6 million to settle a class-action lawsuit filed by a former stockholder of its Compaq Computer Corp. unit.

The lawsuit, filed by Mark Berger in federal court in Houston in April 1998, contended that some Compaq executives artificially inflated the stock price by issuing misleading statements while selling their shares. Hewlett-Packard bought Houston-based Compaq in May for $18.9 billion.

Berger said in the suit that some Compaq executives sold almost 2.6 million shares of stock for more than $120 million between July 1997 and March 1998 before the company warned about high inventory and reduced profit.

While agreeing to the settlement, the executives, who were sued along with the company, denied any wrongdoing.

Shares of Palo Alto-based Hewlett-Packard rose 49 cents to $15.71 on the NYSE.