HP, Shareholders Officially End Litigation Over Autonomy Buy

CEO Meg Whitman and HP board are absolved, but former Autonomy executives will not be exempt from any subsequent litigation.

HP Autonomy Lawsuit

Hewlett-Packard and a group of shareholders came to an agreement June 30 to settle a total of three billion-dollar lawsuits involving HP's problematic $11.1 billion acquisition of U.K.-based big data analytics provider Autonomy in 2011.

Reuters on June 27 had reported, and eWEEK carried the news, that the settlement was imminent. The settlement, reached through mediation conducted by retired U.S. District Judge Vaughn R. Walker in California Superior Court of Santa Clara County, still is subject to court approval.

Several weeks after HP's announcement in November 2012 that Autonomy had engaged in accounting improprieties, misrepresentations and disclosure failures before HP acquired the company, the lawsuits were filed against current and past HP directors, officers and advisers.

As a result of the agreement, however, attorneys for the shareholders will drop all claims against HP's current and former executives—including CEO Meg Whitman, current board members and advisers to the company—the source told Reuters.

Former Autonomy executives, however, will not be exempt from any subsequent litigation. As part of the agreement, the shareholders' attorneys will assist HP in pursuing claims against Autonomy co-founder and former CEO Mike Lynch, its former Chief Financial Officer Sushovan Hussain and others related to Autonomy.

HP's CEO at the time of the acquisition in fall 2011 was Leo Apotheker, who served in the job for 11 months and pushed hard for the deal. Whitman, who succeeded him in September 2011, was a member of the board when the deal was being considered.

Soon after the acquisition took place, it was apparent to executives at HP that there were serious problems with both the Autonomy software and with the company's financials. eWEEK was told in confidence at the time that the search and analytics software was slow and difficult to parse—even for expert storage and database administrators—and also that the sales numbers simply didn't add up in the accounting office.

Lynch, who has a doctorate from the University of Cambridge in signal processing, has disputed HP's accusations that he or any other Autonomy executives doctored financial records before the deal. He has charged that HP's mishandling of the company after the acquisition created the problems.

Autonomy first attracted HP's attention as an all-in-one solution to its unstructured data storage, enterprise search and secure data movement needs. The software maker's IDOL enterprise search engine software also enables enterprises to search for and retrieve information in databases and other repositories throughout IT networks.

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 15 years and more than 4,000 articles at eWEEK, he has distinguished himself in reporting...