The former CFO of a software firm that was acquired by HP has filed a lawsuit challenging a settlement between HP and HP shareholders over that troubled acquisition.
Late last month, HP settled three lawsuits from shareholders in which those shareholders agreed to drop legal claims against HP executives and board members over its $US11 billion acquisition of software firm Autonomy.
As part of the agreement, HP agreed to pay the shareholder’s lawyers at least $US18 million and as much as $US48 million to help HP sue Autonomy, GigaOm’s Barb Darrow reported. HP hired those lawyers on retainer and promised them a cut of financial damages, should HP win an award.
Former Autonomy CFO Sushovan Hussain and his lawyers are calling this a “collusive settlement” and want a judge to review it.
HP has responded by accusing Hussain of fraud. An HP spokesperson sent us this statement:
“Mr. Hussain’s opposition to the settlement is baseless. We look forward to the day when a jury gets to hear the evidence of Mr. Hussain’s conduct. We strongly believe that at the end of the process, the jury will conclude that Mr. Hussain engaged in a multibillion dollar fraud.”
The dispute stems from HP’s troubled acquisition of Autonomy under previous CEO Leo Apotheker while current CEO Meg Whitman was a freshman board member.
Less than a year after buying the British software maker Autonomy for $US11 billion, HP wrote off $US8.8 billion and alleged that Autonomy had improperly inflated its revenues and margins, to the tune of $US5 billion. HP called Autonomy’s alleged actions fraud and asked authorities to investigate.
HP also threatened litigation against Autonomy executives.
Autonomy executives have fervently denied any wrongdoing. They say HP’s mismanagement of Autonomy after the acquisition is what caused the problems.
Former Autonomy CEO Mike Lynch has repeatedly called on HP to share evidence of the alleged fraud. Through this legal action, Hussain is making the same request.
We reached out to Autonomy spokespeople for comment on HP’s latest accusation and will update when we hear back.
This is likely to get even uglier before it gets resolved. Hussain has hired legal powerhouse Keker & Van Nest, which represented Google after Oracle sued it over Android. That firm also represented Lance Armstrong, in connection with the U.S. Department of Justice’s investigation into professional cycling. Although things didn’t end well for Armstrong’s career, no charges were filed against him, his lawyers point out.
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