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Redwood Shores, Calif.-based Oracle (ORCL: news, chart, profile) asked the Delaware Court of Chancery to speed action on an injunction against what PeopleSoft calls its "customer assurance program."

No matter how much comfort the refund may give PeopleSoft customers, Oracle says it's filing that the program is an effort to block a takeover, "potentially making any acquisition -- by Oracle or any other acquirer -- prohibitive."

"Indeed, if the PeopleSoft board is permitted to continue to issue self-serving entrenchment motivated contracts under the revised money back offer, Oracle may be forced to abandon its bid as it will no longer be economically reasonable," according to the Monday filing.

Oracle argued further that the loss of the "unique opportunity" to make a bid to PeopleSoft shareholders constitutes "irreparable injury".

Shares of Oracle fell 15 cents to $12.42 in midday trading. PeopleSoft shares fell 63 cents to $21.42.

A PeopleSoft (PSFT: news, chart, profile) spokesman stood by the refund program last week, saying that anything that gives customers more security about their software purchases is good for the company, and ultimately good for shareholders.

An Oracle spokesman said early Tuesday that the filing doesn't mean that it wants to back away from the bid.

"Oracle remains committed to this deal, which is why we're fighting so hard to make it happen," said Jennifer Glass, an Oracle spokeswoman. "But PeopleSoft management's entrenchment tactics continue to destroy the value of the company for its shareholders."

PeopleSoft's plan promises customers a refund of between two and five times their software license fees if PeopleSoft is purchased, and if the acquirer fails to meet conditions set by PeopleSoft's board. One of those conditions is that the acquirer continues to offer customer support for PeopleSoft's products.

In a court filing on Monday, Oracle took issue with a part of PeopleSoft's recently revised assurance program that would trigger rebates if there's a change in majority control of PeopleSoft's board, whether that change occurs through acquisition or a shareholder vote.

Oracle CEO Larry Ellison has said he is willing to fight over a period of several years for control of PeopleSoft's board, if necessary.

Last week, a group of PeopleSoft shareholders sued to block the refund program, calling it a "nonredeemable poison pill" that in effect makes PeopleSoft prohibitively expensive to acquire.

PeopleSoft said last month that the potential liability for an acquirer under the assurance program was about $800 million at the end of the third quarter.

If it is successful, Oracle's tender offer for PeopleSoft, announced in June, would be the largest hostile takeover in the technology industry and one of the largest deals ever among software companies.

Yet Redwood Shores, Calif.-based Oracle faces several key hurdles before it can put its hostile bid in front of PeopleSoft shareholders for a vote. One is that the Justice Department is still looking at potential antitrust conflicts that might arise from the combination. Justice's decision to block the deal or to let it go through with or without conditions could come as early as this month.

In addition to the ongoing Justice Department review, Oracle's bid is under review by regulators in Europe. And while they haven't announced any legal action, several U.S. states have banded together to share the cost of gathering information on the potential deal and the overall software market.