Talks are reportedly underway to settle the lawsuit from HP shareholders over its troubled acquisition of Autonomy
HP is reportedly holding talks to settle a lawsuit filed by shareholders disgruntled with the company’s decision to take a $8.8billion (£5.3bn) non-cash impairment charge “accounting improprieties” relating to its $10.3 billion (£6.7bn) takeover of Autonomy in 2011.
The lawsuit was filed against the company in 2013, alleging that CEO Meg Whitman and the HP board had ignored warnings that Autonomy’s financial numbers had been exaggerated, although it should be noted that former CEO Leo Apotheker was in charge at the time.
A separate lawsuit has also been brought against auditors KPMG and Deloitte for failing to discover evidence of alleged “serious accounting improprieties” during their audits of the former British software giant.
Lawyers representing HP and the shareholders are meeting to discuss how HP intends to proceed with the lawsuits, according to Bloomberg, which speculates a settlement could be reached and that the lawsuits could be broadened to include former Autonomy executives, notably Dr Mike Lynch.
Lynch for his part has always denied HP’s charges of “serious accounting improprieties”, and has repeatedly stated his belief that HP was using Autonomy as a “scapegoat” for HP’s own failings, and had “mismanaged” Autonomy.
Earlier this week, it was reported by the FT that HP executives had been aware of some of the sales practices of Autonomy much earlier than they claimed, according to audit papers, accounting documents, internal emails and unnamed people familiar with Autonomy’s deals. Meanwhile HP’s allegations against Autonomy are being investigated by the US Department of Justice and the UK’s Serious Fraud Office.
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