HP reaches agreement in three Autonomy acquisition lawsuits
01 Jul 2014
Hewlett-Packard has reached agreement in three shareholder lawsuits pertaining to its $10-billion acquisition of Autonomy. (See: HP reaches agreement over Autonomy litigation).
Under the terms of the agreement, HP would be assisted by shareholders and their lawyers in bringing claims against Michael Lynch, Autonomy's former chief executive officer, Shushovan Hussain, Autonomy's former chief financial officer, and potentially others, HP said yesterday.
Claims in connection with the acquisition against HP's officers, former directors and advisors that were formerly with Autonomy would be pursued while claims against others would be dismissed, , IDG News Service reported.
HP would meanwhile suitably amend policies and procedures for evaluating potential mergers and acquisitions on the lines recommended by the shareholders and their lawyers.
The company did not disclose the financial terms of the deal. The agreement relates to one pending lawsuit before the US District Court for the Northern District of California and two before the California Superior Court for Santa Clara County.
According to a court filing the counsels for the settling shareholders could stand to win a share of financial gains from future litigation by HP in the Autonomy case.
The UK infrastructure software vendor was acquired by HP in 2011, but in November the next year HP said it was taking a $8.8-billion charge as Autonomy had allegedly engaged in accounting improprieties, misrepresentations and disclosure failures before HP's acquisition of the company.
HP spent more than $10 billion in the acquisition of Autonomy, which developed software for searching and managing information.
Shareholders brought a suit against the company in 2012, alleging that HP was aware of or ''should have known' that corporate governance firms, auditors and other parties had questioned Autonomy's market value over concerns about its accounting methods.
In May 2012, Autonomy founder and CEO Mike Lynch was ousted from HP. Denying any wrongdoing he maintained HP was aware of Autonomy's accounting practices before the acquisition, and he and others had been victims of a smear campaign launched by IT giant.
In response to the lawsuit settlement, Lynch posted a statement on his website to mount a public defence against HP's claims.
''We continue to reject HP's allegations, and note that over recent months a number of documents have emerged that prove Meg Whitman misled her shareholders,'' the statement reads. ''We hope this matter will now move beyond a smear campaign based on selective disclosure and HP will finally give a full explanation.''
