The present board of software firm Computer Associates has struck back in its battle to stay in power by suing its rival, Texas entrepreneur Sam Wyly, for breach of contract.
The board, which is up for re-election on 29 August against a team lead by Wyly, has based its suit on a non-competition clause included in CA's $4bn stock takeover of Wyly's former company, Sterling Software, last February.
According to the suit, which also names Wyly's investment company Ranger Governance, CA paid Wyly $4m to prohibit him from "participating or engaging, as a director or otherwise, in any of the activities of Sterling" for five years.
"Put simply, Wyly is doing exactly what the agreement forbids him from doing," the suit states.
Wyly dismissed the suit as "totally bogus".
"I'm not competing with CA, I'm competing with [current chairman] Wang," he said.
Last week, Wyly claimed CA had lost its way when it came to customer service, and that according to his research nearly half of CA's present customers would like to end their deal.
However, CA flatly dismissed the survey's reports, and independent customer-service monitor Guidestar called it "a thinly veiled piece of propaganda".
CA's new lawsuit also claims that Wyly has falsely disparaged the existing management and endangered shareholder value, and that Wyly has failed to disclose his "chequered" business history.
But CA has been accused of less than above board behaviour itself. In May, the firm came under fire from the New York Times for accounting practices that allegedly overstated sales figures.
Wyly also accused CA earlier this month of letting "the best software market in history pass it by".
Wyly has claimed strong institutional investor support for his bid, but faces an uphill struggle to win control after CA's largest shareholder, who owns 21 per cent of the company's stock, came out in support of the present board.
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