News Column

Judge questions HP settlement for shareholders

August 26, 2014

DAN LEVINE



A US judge yesterday cast doubt on a proposed agreement struck between Hewlett-Packard and plaintiff shareholders to settle a lawsuit over the computing giant's botched acquisition of Autonomy.


At a hearing in San Francisco, US District Judge Charles Breyer rejected around $18m (£10.9m) in fees that shareholder attorneys would have recouped under the settlement.


In order to approve the remainder of the deal, Breyer said he would have to make further inquiries into whether dismissing claims against HP officers, including current chief executive Meg Whitman, was fair for shareholders.


HP announced a $8.8bn writedown in November 2012, just over one year after buying Autonomy, and linked more than $5bn to accounting fraud and inflated financials by Autonomy executives. The British company has denied any wrongdoing.


Under the terms of the settlement reached in June, shareholder attorneys agreed to drop all claims against HP's current and former executives, including Whitman, board members and advisers to the company. HP agreed to work with the shareholder attorneys to bring claims against former Autonomy executives, including chief executive Michael Lynch.


Yesterday, HP attorney Marc Wolinsky revealed that HP also intends to sue the British unit of Deloitte & Touche over its role in auditing Autonomy. Deloitte was not available for comment.


Breyer scheduled another court hearing next month to decide how to move forward, and whether former Autonomy chief financial officer Sushovan Hussain and others would be allowed to formally intervene in the case. The judge said he would weigh the evidence against HP officers to see whether the deal absolving them of liability is fair for shareholders.


Reuters


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Source: City A.M. (UK)


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