Autonomy man takes HP to court

Mr. Lynch, who has been a vocal critic of Meg Whitman, HP’s current chief executive, has denied the claims of wrongdoing, and said that he looked forward to showing his actions had not undermined the multi-billion dollar acquisition.

In late March, HP announced that it planned to sue Lynch and Sushovan Hussain, Autonomy’s former CFO, for $5.1 billion, alleging that they had engaged in fraudulent activities to increase the company’s value. In the complaint, Lynch argues that all of HP’s claims against him saying that he mismanaged Autonomy in order to artificially inflate its value are false and should be rejected. “Worse – HP knew, or should have known, these statements were false”, he said in a statement.

In April of this year, HP launched its own major lawsuit in British courts, following the Serious Fraud Office (SFO) in Britain closing its investigation into the sale of Autonomy citing “insufficient evidence” for a realistic prospect of conviction of Lynch.

In November 2012, Hewlett-Packards general counsel said that Autonomy misrepresented its gross profit margin and also falsely created or miscategorized more than $200 million in revenue over a two-year period starting in 2009.

“HP’s own documents, which the court will see, make clear that HP was simply incompetent in its operation of Autonomy, and the acquisition was doomed from the very beginning”.

The Financial Times reported that Lynch’s filing says: “The fact that HP’s impairment calculation fluctuated by such large sums in the days before the calculation was finalized show that HP’s calculation was based (at least in part) on broad, subjective judgments on the part of HP’s top executives”.

“Before going ahead with the acquisition they discussed firing their CEO”, he claimed.

Private calculations by Cathy Lesjak, the company’s chief financial officer, would have written off all of the $7.6bn of synergies claimed for Autonomy, according to Dr Lynch’s counterclaim.

HP subsequently “swooped” for $11.1bn in August 2011, although the documents released last week indicate that there was a wide degree of doubt and uncertainty within HP over the wisdom of the deal.

HP has issued a statement in response to news of the lawsuit, which was published in Computerworld: “Mike Lynch’s lawsuit is a laughable and desperate attempt to divert attention from the $5 billion lawsuit HP has filed and the ongoing criminal investigation”.

“By taking these steps, we can take control of the process”, Lynch told the New York Times. Lynch added that all of HP’s $1 billion-plus deals in the last decade have “failed”.