Advertisment

Oracle says unlikely to face customer liabilities

author-image
CIOL Bureau
Updated On
New Update

SAN FRANCISCO: Oracle Corp. on Friday said it faced a potential liability of up to $3.5 billion if it failed to meet certain obligations to PeopleSoft customers, but added that it did not plan to take any actions that would trigger the penalties.



The business software maker asserts that PeopleSoft tried to ward off Oracle's June 2003 takeover bid by giving guarantees to customers that an acquirer would support and update their products. The guarantees were worth as much five times the license and first-year support fees, Oracle said.



In a filing with the U.S. Securities and Exchange Commission on Friday, Oracle said it does not believe that its post-acquisition activities will trigger the guarantees, and that in any event it would have "substantial defenses" should a customer try to enforce the agreement.



PeopleSoft, which in December agreed to a $10.3 billion buyout after 18 months of heated negotiations, offered six different versions of its customer assurance program, or CAP, between June 2003 and December 2004, Oracle said.



Oracle has pledged to keep more than 90 percent of PeopleSoft's product development and support teams, and to provide new versions of PeopleSoft's software over time.



"We have publicly stated that customers will receive updates for as long as they continue to purchase software support and that we intend to provide a level of support services that would not trigger the penalty provisions under the requirements of the various CAPs," Oracle said in the filing.



Oracle completed its acquisition of PeopleSoft in January, creating the world's second-largest business software maker after Germany's SAP AG.

tech-news