Home Technology HP Settles Class Action Lawsuit Related To Autonomy Deal For $100M

HP Settles Class Action Lawsuit Related To Autonomy Deal For $100M

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Hewlett-Packard agreed to settle the securities class action lawsuit filed against it in connection with the impairment charge it recorded after acquiring Autonomy.

“While HP believes the action has no merit, it is desirable and beneficial to HP and its shareholders to resolve settle the case as further litigation would be burdensome and protracted,” according to the company in a statement.

Details of the settlement

HP signed a settlement agreement with PGGM Vermogensbeheer B.V., the lead complainant in the case.

According to HP, its insurance will pay $100 million to a settlement fund. The money will be used to compensate peole who bought HP shares from August 19, 2011 until November 20, 2012.  No individual will contribute to the settlement.

As part of the settlement, the company including its former and current officers, directors, and advisors will be released from any securities claims related to the Autonomy deal.

Last year, HP also settled three lawsuits filed by shareholders in connection with the Autonomy deal.

HP Autonomy deal

In 2011, HP acquired Autonomy, a British software company, for $11.1 billion in cash to expand its business offerings in cloud computing. The deal was initiated by its former CEO Leo Apotheker.

During the fourth quarter of 2012, HP recorded $8.8 billion accounting charges. According to the company, $5 billion of the $8.8 billion write-down were associated with the Autonomy acquisition. The company said it discovered serious “accounting improprieties, misrepresentation, and disclosure failures” on the transaction.

Following its disclosure, Investors filed civil securities lawsuits againts the company. The Securities and Exchange Commission (SEC), Federal Bureau of Investigation (FBI), and the Serious Fraud Office of the United Kingdom investigated HP’s Autonomy deal.

Last March, HP filed a lawsuit against former Autonomy CEO Michael Lynch and former CFO Sushovan Hussain in London. The company alleged that both executives committed fraudulent activities during their tenure at Autonomy. HP was seeking $5.1 billion in damages from Lynch and Hussain.

Lynch strongly and repeatedly denied the allegations of HP that they committed accounting irregularities in the Autonomy deal.

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