While an investigation by HP found he had not violated the company's harassment policy, it did reveal irregularities in expense payments.
Oracle co-founder and CEO Larry Ellison publicly criticised the HP board's handling of the matter, saying it was "the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago."
Oracle and HP have traditionally worked together in their respective roles as software and hardware vendors. But Oracle's acquisition of Sun Microsystems made it a hardware supplier too. This situation is similar to the way Google's move into the mobile phone space has led to a weakening od its ties with Apple.
Hurd has now been hired by Oracle as a president and member of the board, replacing Charles Philips. "Mark did a brilliant job at HP and I expect he'll do even better at Oracle," said Ellison.
"There is no executive in the IT world with more relevant experience than Mark. Oracle's future is engineering complete and integrated hardware and software systems for the enterprise. Mark pioneered the integration of hardware with software when Teradata was a part of NCR," he added.
HP has turned to the courts in an attempt to block the appointment - see page 2.
Some observers have tipped Hurd as a possible successor to Ellison due to his significant experience and results plus his relative youth - Hurd is 13 years younger than his new boss. However, Ellison previously anointed the 48 year-old Catz as his likely successor.
HP has stuck back with a lawsuit claiming Hurd will be unable to perform his duties at Oracle without breaching the confidentiality agreement under which he received "millions of dollars in cash, stock and options".
Hurd's contract reportedly did not include a no-compete clause. The suit has been brought in California, a state where judges are reluctant to rule in favour of previous employers in such situations.
Ellison was unimpressed by HP's move. "Oracle has long viewed HP as an important partner," he said.
"By filing this vindictive lawsuit against Oracle and Mark Hurd, the HP board is acting with utter disregard for that partnership, our joint customers, and their own shareholders and employees. The HP Board is making it virtually impossible for Oracle and HP to continue to cooperate and work together in the IT marketplace," he added.