Hewlett-Packard Company (NYSE:HPQ) issued a statement regarding an earlier report that it agreed to settle the derivative lawsuits filed by shareholders in connection with its acquisition of software maker, Autonomy.
“HP is in serious discussions to settle the shareholder derivative litigation related to Autonomy, but no final deal has been reached yet,” according to Hewlett-Packard Company (NYSE:HPQ) in a statement.
The report from Reuters indicated that the lawyers representing shareholders agreed to drop all of their accusations against the former and current executives of Hewlett-Packard Company (NYSE:HPQ) including CEO Meg Whitman and its board of directors.
Under the settlement agreement, Hewlett Packard Company (NYSE:HPQ) agreed to work with the lawyers of the shareholders to pursue against the former executives of Autonomy including its co-founder and CEO Michael Lynch, according to a source. The company is expected announce its final settlement agreement with shareholders regarding the derivative litigation
Hewlett-Packard Company (NYSE:HPQ) faced shareholder lawsuits after an $8.8 billion write-down in November 2012, related to the Autonomy acquisition. At the time, HP explained that $5 billion of those charges were caused “serious accounting improprieties, misrepresentation and disclosure failures” of the former management of Autonomy.
Shareholders alleged that the board of directors and management of Hewlett-Packard Company (NYSE:HPQ) of ignored the warnings regarding Autonomy’s accounting irregularities at they failed to thoroughly evaluate the deal in 2011.
Former Autonomy CEO and co-founder Michael Lynch strongly denied the claims of Hewlett-Packard Company (NYSE:HPQ). According to him, evidences in public domains showed that it was fully open and transparent with the PC maker on the transaction as noted in a report published by Financial Times on February 17, 2014.
A spokesperson for the former Autonomy team said, “We continue to reject HP’s allegations and note that over recent months a number of documents have emerged that prove Meg Whitman misled her shareholders.
Three months ago, Hewlett-Packard Company (NYSE:HPQ) settled a class action lawsuit filed by shareholders related to the Autonomy deal. The PC maker agreed to deposited $57 million into an interest-bearing account within 20 days after the court approves the settlement agreement.
Back then, HP spokesperson Sarah Pompei said the company “reached a mutually acceptable resolution through a mediated settlement.”