As he promised to do, Mike Lynch has filed a counter-lawsuit against HP. He’s seeking at least $US150 million in damages via a London court.
HP called Lynch’s lawsuit “laughable and desperate.”
The fighting between HP and Mike Lynch is the stuff of an Aaron Sorkin movie.
All of this stems from HP’s acquisition of Autonomy for about $US11 billion in cash in 2011. HP fired the CEO who orchestrated the deal, Leo Apotheker. Less than a year after it closed, HP CEO Meg Whitman wrote off most of it, $US8.8 billion, and claimed that HP had been duped by Autonomy officials, accusing them of fraud.
Lynch has always vehemently maintained his innocence, claiming that it was HP’s own mismanagement of Autonomy that caused problems with the company after the acquisition.
Now, Lynch’s countersuit is in response to HP’s $US5.1 billion lawsuit filed against him and other Autonomy officials, which was filed in March.
Both lawsuits have been filed in the UK’s High Court. Autonomy was a UK company.
The more information that surfaces about what really happened, the more it seems that there’s some merit to both sides of the argument.
For instance, last week, Lynch released some internal HP documents to Fortune’s Barb Darrow, including emails from then chairman Ray Lane which showed he tried to stop the deal at the last minute.
“I am still haunted by Autonomy itself,” Lane wrote. Lane asked Apotheker in an email if there was “any way to get out of the Autonomy deal.”
Lane also discussed how much stock HP would need to buy back to make it look like HP paid less for Autonomy than it did (“to effect an accretion that would buy down the Autonomy purchase to $US7B,” he wrote.)
For its part, HP has listed numerous examples of transactions from Autonomy’s books as examples that it says backs up its claims.
The statements and press releases are no-holds-barred fightin’ words. Both companies are duking it out in the press in a battle of public opinon.
In the press release announcing the lawsuitpress release announcing the lawsuit, Lynch’s team writes:
Evidence shows that at the time of the acquisition, HP was in chaos. Before going ahead with the acquisition they discussed firing their CEO. They then tried to abort the deal after closing, ultimately did fire the CEO, and generally fought amongst themselves like cats in a sack, causing Autonomy to disintegrate.
Lynch and team also maintain that “Autonomy was the victim of political infighting within HP” and that at one point, according to emails, HP’s head of human resources gave him a toy shield “in order to fend off all the attacks.”
An HP spokesperson told us: “Mike Lynch’s lawsuit is a laughable and desperate attempt to divert attention from the $US5 billion lawsuit HP has filed and the ongoing criminal investigation. HP anxiously looks forward to the day Lynch and Hussain will be forced to answer for their actions in court.”