HP files lawsuit against Autonomy execs claiming billions in damages
HP has filed a lawsuit in the British High Court alleging fraudulent activity by the founder and finance chief of the British company Autonomy which it bought in 2011 for $11bn.
The US tech firm which later took an $8.8bn writedown on the acquisition is claiming damages from Autonomy founder Mike Lynch and former CFO Sushovan Hussain in the region of $5bn in the latest move in the long-running battle between the two firms.
“HP can confirm that, on 30 March, a claim form was filed against Michael Lynch and Sushovan Hussain alleging they engaged in fraudulent activities while executives at Autonomy. The lawsuit seeks damages from them of approximately $5.1 billion. HP will not comment further until the proceedings have been served on the defendants," an HP spokesperson said.
Representatives for Autonomy's former management said it intends to file its own lawsuit in the UK courts for loss and damage caused by false and negligent statements made against them by HP, with Lynch's claim likely to run in excess of £100m.
HP has been threatening legal action against the executives, gaining backing from shareholders, some of whom had originally pursued legal action against HP directors over the failed purchase which also wiped $3bn from HP's market value in a single day.
A settlement was reached in June in which HP shareholders agreed not to pursue action against any current or former executives of HP, including chief executive Meg Whitman. They also agreed to help HP pursue claims against former Autonomy officials such as Lynch and Hussain, who responded by filing a motion in the US to block the settlement, which they had called "collusive and unfair”.
Two proposed settlements were rejected by a US district court judge, however, the latest proposed deal received preliminary approval in March with a final hearing on the case due to take place in July.
An investigation into the matter by the Serious Fraud Office was closed in January, saying it had found "insufficient evidence for a realistic prospect of conviction". US authorities are still investigating the claims.