Shareholders and HP agreed to bury the hatchet so that they could sue the former owners of Autonomy. US district judge has said that such a deal was wrong because it absolves HP completely from any blame.
Judge Charles Breyer concluded in a San Francisco court filing that the shareholders appear to be relinquishing a whole universe of potential claims regarding HP governance and practices with no factual predicates that overlap the Autonomy acquisition – the subject of this litigation.
He rejected the motion for preliminary approval of the second amended settlement. Judge Breyer added that HP had abdicated its duty to ensure that shareholders’ rights were being protected.
HP bought UK data search and analysis firm Autonomy for $10 billion, but a year later it claimed it found “serious accounting improprieties” and had to write off $8.8bn from the transaction.
Autonomy has denied any wrongdoing and argued that it played by the rules and HP knew about its accounting practices prior to the buyout.
HP said it was disappointed the court did not approve the settlement as submitted, the court recognised that a settlement releasing the HP directors and officers from Autonomy-related claims ‘represents a fair and reasonable resolution of the litigation’ HP remains committed to holding the architects of the Autonomy fraud accountable.