Hewlett-Packard faces $1bn lawsuit! Lost $3bn market value in a single day!!
Hewlett-Packard tried to pull out of its $11bn takeover of British software firm Autonomy before the deal closed, according to claims in a $1bn shareholder lawsuit brought against the US computer maker.
HP’s chief executive Meg Whitman, her predecessor Léo Apotheker, the company’s former chairman Ray Lane and Autonomy founder Mike Lynch are among eight defendants named in the class action suit, filed at California’s San Francisco district court, which accuses those who oversaw the botched deal of conducting “cursory due diligence on a polluted and vastly overvalued asset”.
Whitman and Lane – who resigned as chairman in April after a shareholder revolt – are accused of ignoring damaging evidence from whistleblowers and hiding their full concerns about the Autonomy deal.
They allegedly employed “devices, schemes and artifices to defraud” shareholders into buying the stock, before eventually admitting HP had overpaid in November 2012.
The revelation of an $8.8bn writedown of HP’s book value, related to the Autonomy purchase, which came over a year after the acquisition was completed, wiped more than $3bn from the US company’s market value in a single day.