HP 'in settlement talks over Autonomy lawsuits'

By Sooraj Shah
20 Feb 2014 View Comments

HP is said to have begun settlement talks with shareholders' lawyers on a possible settlement of litigation over the $8.8bn (£5.2bn) writedown of its Autonomy acquisition.

HP bought Autonomy in October 2011 for $11.1bn (£7bn), but after lacklustre sales Autonomy's software CEO Mike Lynch left the firm, sparking a dispute between the companies.

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A source familiar with the matter told Bloomberg that in the latest chapter of the ongoing saga, HP has begun talks with lawyers for the company and investors to discuss how it proposes to combat lawsuits that allege that senior executives, including HP CEO Meg Whitman, ignored warnings about Autonomy's accounting practices, and did not vet the firm's finances properly.

The attorneys are scheduled to meet this week, HP's lawyers revealed in a court filing.

Earlier this week, email records cited by the Financial Times revealed that Autonomy's auditors, Deloitte, signed off some of the deals that are at the heart of allegations that the British software firm was overvalued, although Deloitte denies any knowledge of "accounting improprieties or misinterpretations in Autonomy's financial statements".

However, the report suggested that HP senior executives were aware of controversial Autonomy accounting practices months before a whisteblower flagged them, prompting HP to write down the value of Autonomy after it had acquired the firm.

Autonomy's practice of selling hardware to clients at a loss had been documented by auditors and a report was provided to HP after it bought the British software maker, the Financial Times said.

Lynch had said that Whitman's claims of "active concealment" could not hold, as Autonomy was always "open and transparent" with its auditors.


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