The case before the Delaware Chancery Court this week centers on the various defenses that PeopleSoft has used to thwart Oracle's takeover overtures, countermeasures that have included a traditional "poison pill" and a less traditional sales program guaranteeing PeopleSoft customers $2 billion in refunds if a new owner makes dramatic changes in the company's product support.

In his testimony, PeopleSoft executive Steven Goldby said PeopleSoft's five independent directors continue to oppose the Oracle takeover attempt, even though there has been widespread speculation that it was Craig Conway's hostility to the Oracle bid that cost him his job - though not (yet) his board position - on Friday.

Conway's wrongdoing was related not to this but to misleading industry analysts in September 2003 when he told them the hostile takeover bid wasn't a sales deterrent, Goldby said. This breach of "situational ethics" was the reason PeopleSoft's board dumped him with the extraordinarily curt statement that the board decision resulted from "a loss of confidence in Mr. Conway's ability to continue to lead the company."

It was Oracle lawyer Michael Carroll who obtained the true explanation from Goldby. Oracle is asked the court for a ruling invalidating PeopleSoft's standard anti-takeover rights measure ("poison pill"), and its special money-back-guarantee customer program, which Oracle claims could add a $2 billion liability to the acquisition.

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