Tags: HP | Investors | Sue | Autonomy

HP Investors Sue Over Losses on Autonomy Deal

Monday, 26 Nov 2012 03:35 PM

 

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Hewlett-Packard Co. was sued by shareholders over its $8.8 billion writedown that the company said is related to falsified finances at Autonomy Corp., the British software maker that it bought last year.

The complaint was filed Monday in federal court in San Francisco by the law firm Robbins Geller Rudman & Dowd LLP.

Hewlett-Packard said Nov. 20 that $5 billion of the total charge is due to accounting practices, which were disclosed by a senior executive at Autonomy. Hewlett-Packard said it referred the matter to U.S. and U.K. securities regulators and will also pursue civil litigation. Autonomy has denied the allegations.

Hewlett-Packard said in a statement that some former members of Autonomy’s management team used accounting misrepresentations to inflate its underlying financial performance before the acquisition.

Former Chief Executive Officer Leo Apotheker, 59, agreed in November 2011 to buy Autonomy for $10.3 billion to diversify away from hardware and expand into cloud-computing and add software that searches a broad range of data, including e-mails, music, videos and posts on social networks such as Facebook Inc. Apotheker left in 2011 after less than a year on the job following repeated strategy shifts and forecast cuts.

The writedown is another blow for Palo Alto, California- based Hewlett-Packard, which is already suffering from management turmoil and slowdowns in its personal-computer, printer and technology-services businesses.

During the last half-hour of trading on the New York Stock Exchange, Hewlett-Packard shares were up 2.2 percent at $12.71.

The case is Nicolow v. Hewlett-Packard, 12-05980, U.S. District Court, Northern District of California (San Francisco).

© Copyright 2014 Bloomberg News. All rights reserved.

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