New York: Hewlett-Packard Co and attorneys representing shareholders have agreed to settle litigation over its troubled $11.1bn acquisition of British software company Autonomy Corp, according to a source familiar with the negotiations.
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 CEO 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 source said. The precise nature of such claims and when HP might file them could not be learned. HP took an $8.8bn impairment charge in November 2012 for its purchase of Autonomy only just over a year earlier, with more than $5bn of that linked to what HP said at the time were “serious accounting improprieties, misrepresentation and disclosure failures.”
The size of the loss, and the speed with which it occurred, marks the deal as one of the most disastrous done by a major company in recent years. 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. Reuters