Hewlett-Packard close to settling shareholder lawsuit over Autonomy
The lawsuit centers on accounting irregularities that led to an $8.8 billion writeoff
By Chris Kanaracus | Published: 14:57, 30 June 2014
Hewlett-Packard is in "serious" talks about settling a lawsuit brought by shareholders over its troubled acquisition of infrastructure software vendor Autonomy.
"HP is in serious discussions to settle the shareholder derivative litigation related to Autonomy, but no final deal has been reached yet," HP said in a message posted on its website.
In October 2011, HP spent more than US$10 billion to acquire Autonomy, which develops software for searching and managing information. But after discovering what it called serious accounting irregularities, HP wrote off $8.8 billion of the purchase price.
Shareholders filed suit in 2012, alleging that HP "knew or should have known" that corporate governance firms, auditors and other parties had called Autonomy's market value into question due to concerns about its accounting methods.
Autonomy founder and CEO Mike Lynch, who was ousted from HP in May 2012, has vigorously denied any wrongdoing, saying the company was aware of Autonomy's accounting practices before the acquisition, and has engaged in a smear campaign against Lynch and others.
HP bought Autonomy under the leadership of its former CEO, Leo Apotheker, who was replaced by current CEO Meg Whitman after a short and rocky run in the job.
Lynch responded to reports of the lawsuit settlement in a statement posted on a website he created to mount a public defense against HP's claims.
"We continue to reject HP's allegations, and note that over recent months a number of documents have emerged that prove Meg Whitman misled her shareholders," the statement reads. "We hope this matter will now move beyond a smear campaign based on selective disclosure and HP will finally give a full explanation."
Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com