HP reaches agreement in shareholder suits over Autonomy acquisition
Hewlett-Packard has reached agreement in three shareholder lawsuits arising from its over $10 billion acquisition of Autonomy.
Under the terms of the agreement, the shareholders and their lawyers will assist HP 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 late Monday.
Claims in connection with the acquisition against current and former directors, officers and advisors of HP other than those that were formerly with Autonomy will be dismissed, and HP is to modify its policies and procedures for evaluating potential mergers and acquisitions on the lines recommended by the shareholders and their lawyers.
The financial terms of the deal were not disclosed by HP. The agreement covers 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. The counsels for the settling shareholders could stand to win a share of financial gains from future litigation by HP in the Autonomy case, according to a court filing.
HP acquired the UK infrastructure software vendor in 2011 but in November the next year it said it was taking a $8.8 billion charge as Autonomy had allegedly engaged in accounting improprieties, misrepresentations and disclosure failures before HP acquired the company. Lynch, who was removed from HP in May 2012, has denied any wrongdoing, claiming HP was aware of Autonomy’s accounting practices before the acquisition.
The announcement of the charge triggered a number of shareholder suits which alleged among other things that HP ignored ‘red flags’ concerning Autonomy’s accounting practices, failed to properly evaluate its technology, and did not disclose certain information regarding the acquisition and its aftermath leading up to the announcement of the impairment charge. The lawsuit in the California federal court had consolidated eight lawsuits filed in the court by shareholders.
The agreement requires the relevant courts to give a preliminary approval before a notice is given to HP shareholders for their comment. After this process, there will be a hearing to consider final approval of the agreement, according to a filing in the US District Court for the Northern District of California.
The negotiations for the settlement started in February this year overseen by retired District Judge Vaughn R. Walker, according to the court records.
“It seems [HP CEO] Meg Whitman will be using a large sum of HP’s money to avoid explaining in court why she made false allegations regarding Autonomy in November 2012,” wrote Lynch in a statement last week after reports that HP was planning to settle the suits. Lynch could not be immediately reached for comment on Monday after HP announced the agreement with the shareholders.
Following the news reports, HP said it was in serious discussions to settle the shareholder litigation, but no final deal had been reached yet.
HP has still to deal with other lawsuits and regulatory inquiries into the Autonomy deal.
John Ribeiro, IDG News Service
Subscribers 0
Fans 0
Followers 0
Followers