Saturday 21 April 2018

HP to settle $11bn litigation over UK firm buy

New York, June 29, 2014

Hewlett-Packard and attorneys representing shareholders have agreed to settle litigation over its troubled $11.1 billion acquisition of British software company Autonomy Corporation.

Under the terms of the settlement, involving three lawsuits, the attorneys for the shareholders have agreed to drop all claims against HP's current and former executives, including chief executive Meg Whitman, board members and advisers to the company.

The exception to that will be former officials at Autonomy. As part of the agreement, the shareholders' attorneys will assist HP in pursuing claims against Autonomy's co-founder and former CEO Michael Lynch, its former chief financial officer Sushovan Hussain, and potentially others related to Autonomy.

The precise nature of such claims and when HP might file them could not be learned.

The settlement, which followed mediation, is expected to be announced as soon tomorrow.

HP took an $8.8 billion impairment charge in November 2012 for its purchase of Autonomy only just over a year earlier, with more than $5 billion of that linked to what HP said at the time were "serious accounting improprieties, misrepresentation and disclosure failures."

In particular, sources close to an HP investigation into the matter say that the technology giant believes that Autonomy's results and prospects were made to look much better than they were.

Lynch has consistently denied HP's allegations, saying HP is blaming him for its own failure to manage Autonomy after the acquisition.

A spokesman for Lynch said that "we continue to reject HP's allegations." He said it appears that Whitman will be using a large sum of HP's money to avoid explaining in court why she made the November 2012 allegations regarding Autonomy.

HP responded by saying that it has evidence showing how Autonomy "created the illusion" that it was a high-growth company. "This had the effect of misleading investors and HP", it said in a statement.-Reuters

Tags: HP | UK company | litigation |

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