Lynch mob sues HP

Lynch’s action marks the latest twist in a long-running battle between HP and Lynch that has led to multiple lawsuits over who is to blame for a disastrous deal that cost HP shareholders billions of dollars of value.

It is a counterclaim to HP’s attempt to get $5.1 billion in damages from Lynch and Sushovan Hussain, Autonomy’s former chief financial officer.

HP’s $11bn (€9.82bn) purchase of Autonomy was supposed to form the central part of the United States group’s move into software. 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.

Meanwhile, HP said Thursday that its board on Wednesday formally approved to split the company into two entities: HP Inc., handling its PCs, consumer products and printers; and Hewlett Packard Enterprise Co., handling enterprise services and more.

Lynch added: “We are finally starting to see what really happened with Autonomy”.

“Over the past three years, HP has made many statements that were highly damaging to me and misleading to the stock market”, Lynch said.

“While in the hands of a competent acquirer, the synergies on which HP based its valuation of Autonomy may have been achievable”, Lynch’s filing states, “HP, which had been beset by a series of disruptive boardroom scandals, management shake-ups, and failed mergers, was not competent to incorporate the business of Autonomy into its own”.

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

Lynch’s new lawsuit comes just days after the emergence of new evidence suggesting that HP had serious concerns about the acquisition even before it was announced.

Lynch is referring to KPMG’s due diligence report (PDF) that HP was recently forced to reveal. “[HP’s management] generally fought amongst themselves like cats in a sack, causing Autonomy to disintegrate”, Lynch claimed.

“Tragically, Autonomy is only one deal among the many that were mishandled by HP, which has written down $9bn on three separate occasions since 2011”.

He concluded: “Meg Whitman can explain all this to a judge when we finish this in court once and for all”.

HP was not immediately available to comment.

HP claimed that Lynch’s lawsuit was a “laughable and desperate attempt to divert attention from the $5 billion lawsuit HP has filed and the ongoing criminal investigation”.

The company said in a statement that it “anxiously looks forward to the day Mr. Lynch and Mr. Hussain will be forced to answer for their actions in court”.