Bloomberg News

HP Seen Suing Ex-Autonomy Officers, Not Its Own, Over Merger (1)

May 20, 2014

Hewlett-Packard Co. (HPQ:US)’s board was urged by a committee that reviewed the company’s purchase of Autonomy Corp. to pursue legal claims against former executives of the British software maker and to take no action involving its own officers, according to a court filing.

Lawyers for shareholders (HPQ:US) were briefed by the committee that was examining possible litigation strategies for Hewlett-Packard over its $8.8 billion writedown of the Autonomy merger, according to the filing in federal court in San Francisco. Hewlett-Packard hasn’t disclosed what, if any, action it will take.

The board appears to have adopted the committee’s recommendation not to pursue Hewlett-Packard’s directors and senior executives, as shareholders had requested, the lawyers said in the filing. The committee also appears to have recommended the company take “remedial measures designed to prevent a recurrence of actions which damaged HP,” according to the filing. It didn’t say which ex-Autonomy executives might be sued.

Hewlett-Packard’s current chief executive officer, Meg Whitman, its previous CEO, Leo Apotheker, and the company’s board have faced separate lawsuits claiming they ignored warnings about accounting irregularities at Autonomy and failed to properly vet its finances before paying $10.3 billion in an acquisition engineered by Apotheker. The company said it was the victim of fraud by Autonomy’s former management.

Autonomy Founder

Autonomy founder Mike Lynch has denied there were accounting improprieties at the company and said it struggled because HP stymied the Cambridge, England-based software company’s sales.

A spokesman for Lynch, who asked not to be named citing company policy, declined to comment on the filing.

Hewlett-Packard agreed on March 31 to pay $57 million to settle one shareholder lawsuit accusing Apotheker of making misleading statements about operations before he was ousted.

Michael Thacker, a spokesman for Palo Alto, California-based Hewlett Packard, declined to comment yesterday on the filing.

The information about the briefing appeared in a letter attached as an exhibit to a complaint by shareholders brought on behalf of the company in what’s known as a derivative lawsuit. Last week, in another derivative suit, a federal judge in San Francisco granted another request by both Hewlett-Packard and investors also suing over the writedown caused by the Autonomy purchase to put that case on hold until June 16.

The case is Steinberg v. Apotheker, 14-cv-02287, U.S. District Court, Northern District of California (San Francisco).

To contact the reporters on this story: Karen Gullo in federal court in San Francisco at kgullo@bloomberg.net; Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Peter Blumberg


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  • HPQ
    (Hewlett-Packard Co)
    • $37.0 USD
    • 1.88
    • 5.08%
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