U.S. District Judge slams HP's Autonomy Settlement
On Monday, the US District Judge slammed all the settlement made by Hewlett-Packard's with the attorneys representing its shareholders, in context of the $11.1 billion takeover of British software company Autonomy Corp. in 2011.
Autonomy Corp. is a software company that HP acquired, but later accused of inflating financial figures as in November 2012, HP announced an $8.8 billion write-down just over one year after buying Autonomy. The multinational IT Corporation stated that more than $5 billion was due to accounting fraud and inflated financials by Autonomy executives. Keeping view of all this, an agreement was struck between HP and applicant shareholders whereby they settled a lawsuit over this failed acquisition.
The settlement stated that the shareholder attorneys will agree to drop all claims against HP's current and former executives, board members and advisers to the company. Instead of it, all the shareholder attorneys were made to bring claims against former Autonomy executives.
The series of serious assertions of improprieties, misrepresentation and disclosure failures were imposed against Autonomy. This has prompted the US Securities and Exchange Commission and the Federal Bureau of Investigation to undertake an investigation in this matter.
US district judge Charles Breyer rejected several million dollars in fees that shareholder attorneys would have recouped under the settlement and casted serious doubts over a proposed agreement struck between HP and its plaintiff shareholders.
Autonomy attorney John Keker called the deal a "whitewash" and requested the judge to grant him permission to review internal HP documents that absolve Meg Whitman and others of wrongdoing.
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