HP pays $57 million to finally put WebOS behind it
The company settles a class-action lawsuit that accused its leadership of rash decision-making that left shareholders out in the cold.
Hewlett-Packard is still paying for the managerial sins of Leo Apotheker.
HP on Monday settled a class-action lawsuit that will see the company deposit $57 million into an interest-bearing escrow account within the next three weeks. Upon deposit, US District Court Judge Andrew Guilford will approve the settlement.
Reuters earlier reported on the settlement.
The class-action lawsuit was filed by a handful of pension funds and asset-management companies that complained of the company's rash decision-making in 2011 that stunned investors and tossed out a road map HP had been publicly promoting for years. The plaintiffs accused HP of violating federal securities laws in part for making "false and misleading statements" that "were not forward-looking."
The fateful day in question was August 18, 2011, when former CEO Leo Apotheker announced plans to kill WebOS, an operating system that HP had acquired from Palm and had integrated into its mobile device portfolio. Apotheker followed that news with plans to acquire software company Autonomy and possibly ditch the PC business.
The moves were considered necessary by Apotheker, who argued that HP wasn't on the proper strategic path for growth. Shareholders were quickly critical of his plans, and shares dropped more than 25 percent by trading's end on August 19, 2011.
Although HP fired Apotheker just under a year into his tenure as CEO, the class-action lawsuit that was settled on Monday asked the company to pay for his strategic change of heart. The plaintiffs argued that HP had been selling them on a particular plan revolving around WebOS and PCs for quite a while and that the sudden change in course was of a"false and misleading nature."
For its part, HP has commented little about the case, but a spokeswoman did tell Reuters on Monday that the resolution was "mutually acceptable" to both sides.
CNET has contacted HP for comment on the lawsuit. We will update this story when we have more information.