A federal judge in California has allowed a committee of Hewlett-Packard's directors to begin a probe into the circumstances culminating in Mark Hurd's departure from the company.

U.S. District Judge James Ware of San Jose has halted a lawsuit by HP shareholders and has rescheduled the hearing for March 21, instructing HP to submit an update on the investigation.

The lawsuit alleges HP wasted money by giving Hurd a severance package worth about $40 million in cash, stock and options when he resigned as CEO last August amid sexual harassment allegations. The case in U.S. District Court, Northern District of California is In Re HP Derivative Litigation, 10-03608.

The separation agreement was later pared back under a settlement between HP and Hurd over his hiring as a co-president at Oracle.

The probe will be conducted by independent directors who joined HP's board after Hurd's departure, assisted by outside lawyers (i.e. lawyers not involved in the shareholder litigation), according to a January 14 court filing.

Oracle Court California Settlement