Update 12.50pm GMT: Included statement from former HP CEO, Leo Apotheker.
In a victory for the PC maker, Hewlett-Packard has reached an agreement with shareholders to withdraw three lawsuits based on the costly and damaging acquisition of Autonomy.
On Tuesday, the tech giant announced a tentative settlement agreed between itself and shareholders which removes HP executives from the firing line.
Under the terms of the deal, lawyers from Cotchett, Pitre & McCarthy, LLP, and Robbins Geller Rudman & Dowd LLP will assist HP should the firm decide to file lawsuits against former Autonomy executives, including former CEO Mike Lynch and former CTO Shushovan Hussain. All claims against current and former directors, officers and advisors of HP based on the Autonomy acquisition will be dismissed.
No other potential terms, such as financial restitution for investors or damages have been revealed.
HP acquired British software firm Autonomy in 2011 for £7.1bn, roughly $11 billion, but later wrote down the value of the buyout by approximately $5 billion — as part of a larger $8.8 billion write down in a fourth-quarter earnings report. At the time, HP said:
The majority of this impairment charge is linked to serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy Corporation plc that occurred prior to HP's acquisition of Autonomy and the associated impact of those improprieties, failures and misrepresentations on the expected future financial performance of the Autonomy business over the long-term.
The three lawsuits that will be dismissed are pending in the US District Court for the Northern District of California, as well as California Superior Court for Santa Clara County. The shareholders sued HP in 2012, alleging that the company misled investors and hid concerns over the financial state of Autonomy. One shareholder claimed that the acquisition was allowed to go ahead due to a lack of "cursory due diligence on a polluted and vastly overvalued asset."
HP appointed an independent committee of directors to review shareholder claims, and as a result, the firm believes it has claims against Lynch and Hussain — although no lawsuits have been filed. Lynch has consistently claimed that he did nothing wrong, and shoddy HP management and mishandling of Autonomy after the acquisition is to blame.
A spokesperson for former CEO of HP, Leo Apotheker, told ZDNet:
Mr. Apotheker has maintained all along that he acted with integrity, good faith and in partnership with the HP Board on the Autonomy acquisition. He believes the Special Committee's conclusions are a welcome measure of vindication given some of statements and innuendo against him at the time, and he is pleased to have this chapter behind him. He will have no further comment.
When reports of the potential settlement appeared, a spokesperson for Autonomy's former management also sent ZDNet the following statement:
It seems Meg Whitman will be using a large sum of HP's money to avoid explaining in court why she made false allegations regarding Autonomy in November 2012. 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. We hope this matter will now move beyond a smear campaign based on selective disclosure and HP will finally give a full explanation.
The settlement is subject to court approval. Talks to reach this point have been ongoing since February, but there are still other shareholder class action lawsuits that have not been affected by this settlement.
The PC giant also said that it is in the process of "adopting enhancements" to policies and procedures in evaluating future mergers and acquisitions.