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J.D. Edwards sues Oracle

The $1.7 billion suit claims that the database maker has illegally interfered in its proposed merger with PeopleSoft.

J.D. Edwards said Thursday that it has filed a $1.7 billion suit against Oracle, claiming the database maker has illegally interfered in its proposed merger with PeopleSoft.

In a lawsuit filed in Colorado state court, J.D. Edwards alleges Oracle has "tortiously interfered" with the deal and asks a court for $1.7 billion in compensatory damages and an unspecified amount in punitive damages.

J.D. Edwards said it is also filing suit in California state court against Oracle and two of its executives. That suit charges the company, CEO Larry Ellison and Vice President Chuck Phillips with wrongful conduct and unfair business practices. The suit seeks an injunction to prevent Oracle from proceeding with its tender offer for PeopleSoft.

"Oracle's sole aim is to disrupt a merger that will create value for the key stakeholders of J.D. Edwards and PeopleSoft," J.D. Edwards CEO Bob Dutkowsky said in a statement. "Oracle's unsolicited offer for PeopleSoft will only destroy value for our companies' shareholders, customers and employees--and the technology community overall. We will not sit by idly while Oracle pursues this arrogant, unlawful and destructive course of action."

In a statement, Oracle said it had "just heard of this lawsuit" but added it believes the case has "no merit."

"Clearly PeopleSoft and J.D. Edwards prefer to fight in the courts than let shareholders decide," Oracle said.

Earlier Thursday, PeopleSoft formally rejected the unsolicited bid from Oracle. The company said its board had unanimously voted against the deal and planned to proceed with plans to acquire J.D. Edwards. PeopleSoft on Wednesday filed the necessary documents with government regulators to proceed with its bid.