HP's shareholder settlement deal over Autonomy merger DENIED – again
Judge: 'a whole universe of potential claims relinquished'
A US district judge has thrown out a proposed settlement deal of a sueball lobbed at HP by some of the company's shareholders, after it bought Blighty software outfit Autonomy for $10.7bn in 2011.
"The shareholders appear to be relinquishing a whole universe of potential claims regarding HP governance and practices with no factual predicates that overlap the Autonomy acquisition – the subject of this litigation," judge Charles Breyer concluded in a San Francisco court filing (PDF).
He rejected the motion for preliminary approval of the second amended settlement.
A little over a year after HP bought UK data search and analysis firm Autonomy, it claimed it had found "serious accounting improprieties" that caused it to write off $8.8bn from the transaction. The move led to a huge offloading of HP shares.
Autonomy has denied any wrongdoing and argued that it played by the rules with the claim that some HP execs knew about its accounting practices prior to the buyout.
HP, which is set to break into two, said in response to Breyer's ruling:
While HP is disappointed the court did not approve the settlement as submitted, the court recognised that a settlement releasing the HP directors and officers from Autonomy-related claims ‘represents a fair and reasonable resolution of the litigation' HP remains committed to holding the architects of the Autonomy fraud accountable.
Judge Breyer, in summing up his reasons for rejecting the settlement deal, added that HP had abdicated its duty to ensure that shareholders' rights were being protected. ®