A 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.
