HP settles trio of shareholder lawsuits over Autonomy acquisition
HP's $11.1 billion acquisition of the software maker devolved into allegations of accounting fraud.
Hewlett-Packard has agreed to settle shareholder litigation related to its acquisition of enterprise software company Autonomy that led to allegations of accounting fraud.
HP's $11.1 billion acquisition of the software company resulted in controversy, lawsuits, and government investigations in the US and UK after HP announced it had discovered "extensive evidence" that an unspecified number of former employees of Autonomy had cooked the books prior to HP's acquisition in 2011. After HP announced in 2012 it would take an $8.8 billion charge against earnings related to the acquisition, several shareholders sued HP for allegedly making misleading statements about the financial health of Autonomy.
Under terms of the settlement, all claims against HP's current and former directors, officers, and advisers in three separate lawsuits, other than legacy Autonomy officers and advisers, will be dropped, the company said in a statement. Plaintiffs have also agreed to assist HP in bringing claims against former Autonomy CEO Michael Lynch, former CFO Sushovan Hussain, and others, HP said.
HP also said it is in the process of instituting changes to its procedures for evaluating potential mergers and acquisitions that were developed with the help of the plaintiffs.
HP and Lynch have engaged in a public war of words about who was really to blame for Autonomy's disappointing performance. HP said that it was fraudulent accounting and failed disclosures on Autonomy's part leading up to the sale. Lynch subsequently set up a website to deny HP's charges and accuse HP of mishandling the company after acquiring it.
The agreement, which is still subject to court approval, settles one lawsuit pending with the US District Court for the Northern District of California and two in California Superior Court for Santa Clara County. Other shareholder lawsuits unrelated to this settlement are still pending.