Menu
HP hits former Autonomy execs with $US5bn suit

HP hits former Autonomy execs with $US5bn suit

Mike Lynch, who was Autonomy's CEO, vowed he will strike back with his own lawsuit

The UK's Serious Fraud Office may have dropped its investigation of software firm Autonomy earlier this year, but that doesn't appear to have done much to allay HP's ire. HP -- which acquired Autonomy in 2011 -- has confirmed that it plans to sue Mike Lynch and Sushovan Hussain, Autonomy's former CEO and CFO, for $US5.1 billion.

HP filed a Claim Form against Lynch and Hussain on Monday alleging they engaged in fraudulent activities while executives at Autonomy, an HP spokeswoman said via email. "The lawsuit seeks damages from them of approximately $US5.1 billion."

HP will not comment further on the case until the proceedings have been served on the defendants, she said.

HP's filing was made in London's Chancery Division High Court. In response, Lynch, via his website AutonomyAccounts.org, said that Autonomy's former management team plans to strike back with a counterlawsuit, citing "loss and damage caused by false and negligent statements made against them by HP." The counterlawsuit will be filed in the U.K. and will likely seek more than £100 million in damages.

On November 20, 2012, HP announced an "impairment charge" of $US8.8 billion as a result of what it called "accounting improprieties, misrepresentations and disclosure failures in Autonomy financial statements prior to 2011 acquisition by HP." Lynch takes issue with that move, and says it marked the beginning of a "smear campaign" against him and other Autonomy executives.

It's not clear from Lynch's website which other former Autonomy executives are represented by his group.

HP acquired Autonomy for $US11.7 billion. HP shareholders filed suit in 2012, and U.K. regulators launched their investigation into the deal the following year. An investigation by the U.S. Department of Justice is ongoing.

The U.S. Department of Justice did not immediately respond to a request for comment.

"The billions-of-dollar allegations from both sides involved here clearly shows the bad blood from the soured deal," said Raymond Van Dyke, a technology attorney based in Washington, D.C. who isn't involved in this legal tussle.

Indeed, "HP seems to genuinely believe that its previous management was essentially hoodwinked by Autonomy's management into believing that the company was worth far more than it really was," said Charles King, principal analyst with Pund-IT.

The $US5.1 billion suit against Lynch and Hussain is designed in part to recover that considerable difference in value, but also at least partly to demonstrate that HP will do everything in its power to punish those responsible for one of the most embarrassing and damaging episodes in its history, he said.

"The underlying message here is that HP won't be a patsy," King said, "and that anyone making that assumption should be prepared for a long and serious showdown both in and out of court."


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags business managementMergers and acquisitionsHPbusiness issueslegalaccountingAutonomy

Featured

Slideshows

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

More than 500 channel leaders gathered in Auckland on 21 October at the ​Reseller News Innovation Awards ​2020 to celebrate the achievements of the New Zealand technology industry's top partners, start-ups, vendors, distributors and individuals.

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners
Meet the winners of the 2020 Reseller News Innovation Awards

Meet the winners of the 2020 Reseller News Innovation Awards

Reseller News honoured the standout players of the New Zealand channel in front of more than 500 technology leaders in Auckland on 21 October, recognising the achievements of top partners, start-ups, vendors, distributors and individuals.

Meet the winners of the 2020 Reseller News Innovation Awards
Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

This year’s Reseller News 30 Under 30 Tech Awards were held as an integral part of the first entirely virtual Emerging Leaders​ forum, an annual event dedicated to identifying, educating and showcasing the New Zealand technology market’s rising stars. The 30 Under 30 Tech Awards 2020 recognised the outstanding achievements and business excellence of 30 talented individuals​, across both young leaders and those just starting out. In this slideshow, Reseller News honours this year's winners and captures their thoughts about how their ideas of leadership have changed over time.​

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners
Show Comments