Hewlett-Packard Company (NYSE:HPQ)’s disastrous acquisition of British software firm Autonomy continues to cast a long shadow over the company. HP paid $11.1 billion for Autonomy in late 2011, then just barely a year later, wrote off $9 billion of the $11.1 billion purchase price in December of 2012.
There has been a raft of legal actions filed by HP, among others, regarding irregularities in the doomed deal over the last couple of years, and there have been further legal developments this week.
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Recent legal developments in Hewlett-Packard – Autonomy case
As of Monday, U.S. District Court Judge Charles Breyer is hearing hear two motions challenging a recent settlement that Hewlett-Packard Company (NYSE:HPQ) agreed to in June, a class action derivative lawsuit claiming that H-P directors had breached their fiduciary duties in buying Autonomy and then writing off nearly all of the deal a year later.
Motion from former Autonomy CFO Sushovan Hussain
Autonomy’s former CFO Sushovan Hussain filed one of the motions. He contends that the proposed settlement by H-P impinges on his legal rights, mainly due to an order in the settlement which appears to bar Hussain from asserting any counterclaims against H-P or its officers or directors in any future litigation.
Hewlett-Packard Company (NYSE:HPQ) issued a statement saying Hussain is just trying to get more information before being sued by H-P in the UK. Hussain, who has been characterized by H-P as one of the chief architects of the massive fraud on H-P,” is described by an anonymous H-P exec as someone wrapped “in a mantle of self-righteousness in an attempt to obtain discovery that he hopes will help him stay out of prison and defend the civil litigation he expects H-P will file in the U.K.”
Scale of Autonomy accounting irregularities
Hewlett-Packard Company (NYSE:HPQ) announced back in 2012 that around $5 billion of the $9 billion write-down was related to serious accounting improprieties at Autonomy. To date, however, the accounting problems found at Autonomy are only said to be around $200 million in either hardware sales at a loss or fake transactions, compared to more than $1 billion in annual revenue.