Tag: judge

HP and shareholders deal in doubt

Meg Whitman, photo by Mike MageeA US judge is not happy about a proposed agreement struck between HP and plaintiff shareholders to settle a lawsuit over the computing giant’s acquisition of Autonomy.

US District Judge Charles Breyer rejected several million dollars in fees that shareholder attorneys would have recouped under the settlement.

But he added that he would have to make further inquiries into whether dismissing claims against HP officers, including current Chief Executive Officer Meg Whitman, was fair for shareholders.

Under the terms of the settlement, shareholders agreed to drop all claims against HP’s current and former executives, including Whitman, board members and advisers to the company. Instead the two sides would team up to bash former Autonomy executives, including Chief Executive Michael Lynch.

Laughing all the way to the bank were the shareholder attorneys who would have collected $18 million in fees.

The court heard how HP is also gunning for British unit of Deloitte & Touche over its role in auditing Autonomy.

HP’s allegations of accounting improprieties, misrepresentation and disclosure failures at Autonomy have prompted an investigation by the U.S. Securities and Exchange Commission and the Federal Bureau of Investigation, as well as the UK’s Serious Fraud Office. However so far there have been no actual charges levelled against Lynch and co.

Former Autonomy Chief Financial Officer Sushovan Hussain objected to the settlement too saying that it was a “whitewash” and asked that he be allowed to review internal HP documents that absolved Whitman and others of wrongdoing.

HP has vigorously contested Hussain’s ability to review documents that gets Whitman off the hook.

Breyer said he would need to weigh the evidence against HP officers as part of his analysis on whether the deal absolving them of liability is fair for shareholders.

Bryer said that something went terribly wrong with the Autonomy acquisition.


Megacorps get the hard word

Judge-DreedA settlement between Apple, three other IT outfits and their employees has been rejected by a judge saying it was too low given the strength of the case against the employers.

Apple, Google, Intel  and Adobe failed to persuade  US District Judge Lucy Koh to sign off on a $324.5 million settlement to resolve a lawsuit by tech workers, who accused the firms of conspiring to avoid poaching each other’s employees.

Koh in San Jose, California, said there was “substantial and compelling evidence” that Apple Messiage founder Steve Jobs “was a, if not the, central figure in the alleged conspiracy,” Koh wrote

In their 2011 lawsuit, the tech employees said the conspiracy had limited their job mobility and, as a result, kept a lid on salaries. The case has been closely watched because of the possibility of big damages being awarded and for the opportunity to peek into the world of some of America’s elite tech outfits.

The whole case was based largely on emails in which Jobs and Google’s  Eric Schmidt hatched plans to avoid poaching each other’s prized engineers.

In rejecting the settlement, Koh referred to one email exchange which occurred after a Google recruiter solicited an Apple employee. Schmidt told Jobs that the recruiter would be fired. Jobs then forwarded Schmidt’s note to a top Apple human resources executive with a smiley face.

The four companies agreed to settle with the workers in April shortly before trial. The plaintiffs had planned to ask for about $3 billion in damages at trial, which could have tripled to $9 billion under antitrust law.

The plaintiffs are worried because workers faced serious risks on appeal had the case gone forward.

But Koh repeatedly referred to a related settlement last year involving Disney and Intuit. Apple and Google workers got proportionally less in the latest deal compared to the one involving Disney under the settlement.

To match the earlier settlement, the latest deal “would need to total at least $380 million,” Koh wrote.

A further hearing in the case is scheduled for September 10.