Hewlett Packard is now expected to pay just under $1 billion in connection with the acquisition of UK software firm Autonomy, involving the estate of the late Mike Lynch and his former associate.
This legal battle stems from HP’s attempts to recoup losses attributed to Lynch, who passed away last year when his yacht sank off the coast of Sicily.
On Tuesday, HP celebrated a court ruling that mandates a payment of $944 million. This amount reflects the disparity between what HP paid and what it might have invested had it fully understood Autonomy’s “true financial condition.”
HP had previously sued Lynch, alleging he orchestrated a complex scheme to inflate Autonomy’s value, which HP had acquired for $11.1 billion in 2011. In addition to the $944 million, HP is also due an extra $47.5 million related to losses from various transactions involving Autonomy’s subsidiary companies.
A representative for Lynch’s family released a statement indicating that Lynch was aware of the court’s draft ruling prior to his death. Lynch himself had deemed HP’s earlier $5 billion claim as a “wild exaggeration.”
There will be another hearing in November to address the request for an appeal and how damages will be allocated between Lynch’s estate and Hussein.
HP initially filed suit against Lynch and Hussain back in 2015, claiming they devised a fraudulent scheme to enhance Autonomy’s value. Remarkably, within a year, HP decreased Autonomy’s value by a staggering $8.8 billion and subsequently pursued a $5 billion lawsuit against Lynch and Hussein in London.
“It’s quite a few”
The High Court had previously sided with HP in 2022, though the judge noted that the company would receive “much less” than the initially claimed $5 billion.
Lynch, often compared to a British Bill Gates, faced accusations of failing to properly integrate HP following the acquisition. He had plans to appeal the 2022 ruling, a process that lingered while waiting for the recent decision concerning damages, especially after he was acquitted of criminal charges tied to a contract in the U.S.
Judge Robert Hildyard decided that HP would pay £23 per share, instead of the £25.50 that HP originally paid for Autonomy.
In his ruling, Hildyard pointed out that HP’s valuation of claims had always been “substantially exaggerated.”
