HP Sues Autonomy Co-Founder Lynch in U.K. for $5.1 BillionJeremy Hodges
Hewlett-Packard Co. escalated its more than two-year-old battle with Michael Lynch, suing the Autonomy Corp. co-founder, as well as a former chief financial officer, for $5.1 billion.
Hewlett-Packard has maintained that before it agreed to buy the Cambridge, England-based software company for $10 billion in 2011, Lynch and other managers gave an overly optimistic representation of its financial health. The suit was filed in London on Monday, about two months after U.K. prosecutors dropped a fraud probe into the deal.
“HP can confirm that, on March 30, a claim form was filed against Michael Lynch and Sushovan Hussain alleging they engaged in fraudulent activities while executives at Autonomy,” a spokeswoman for Hewlett-Packard said in a statement.
The 49-year-old Lynch and Hewlett-Packard and have been at odds since 2012, when the company wrote down $8.8 billion connected to the acquisition and said more than $5 billion was the result of accounting improprieties by Autonomy.
Autonomy’s former management team responded to the lawsuit by saying they will counter-sue Hewlett-Packard for more than 100 million pounds ($148 million), according to a statement from an external public relations agency.
“The former management of Autonomy announces today they will file claims against HP for loss and damage caused by false and negligent statements made against them by HP on 20 November 2012 and in HP’s subsequent smear campaign,” the ex-management team, including Lynch, said in a statement.
The U.K.’s Serious Fraud Office in January dropped its probe into the takeover after finding “insufficient evidence for a realistic prospect of conviction,” the agency said at the time. The U.S. Department of Justice is still investigating, and the SFO said it gave its files to the U.S. authorities. The U.K. accounting regulator, the Financial Reporting Council, is still looking into the matter.
The fight has been played out in the open on both sides of the Atlantic, with Lynch posting comments and documents on his blog and Hewlett-Packard aligning with shareholders to pursue Lynch and Hussain in court.
The case is Autonomy Corp. & Ors v. Michael Richard Lynch & Anr, HC-2015-001324, High Court of Justice, Chancery Division