Hewlett Packard is owed more than £700m from the estate of the late Mike Lynch and his former business partner over HP’s acquisition of their British software firm Autonomy, London’s High Court ruled today.
HP was seeking to recoup its losses from Lynch – who died last year when his luxury yacht sank off Sicily – and Autonomy’s former chief financial officer, Sushovan Hussain.
The US technology giant welcomed the ruling, which said HP was owed nearly £698m in relation to the difference between the price it paid and the price it would have paid for Autonomy had it known its “true financial position”.
In addition, HP is entitled to another $47.5m for losses suffered by Autonomy group companies in relation to hardware sales and other transactions.
A spokesperson for Lynch’s family released a statement which the spokesperson said Lynch prepared last year before his death, having seen a draft of today’s long-delayed ruling.
Lynch said in the statement that the judgment showed HP’s initial claim for up to $5 billion was a “wild overstatement”.
A further hearing will take place in November, to determine any applications for permission to appeal and how damages to be paid will be divided between Lynch’s estate and Hussain, with whom HP settled earlier this year.
HP sued Lynch and Hussain in 2015, accusing them of masterminding an elaborate fraud to inflate the value of Autonomy, which HP bought for $11.1 billion in 2011.
The deal spectacularly unravelled in less than a year and HP wrote down Autonomy’s value by $8.8 billion within a year before bringing a $5 billion lawsuit against Lynch and Hussain in London.
The High Court ruled in HP’s favour in 2022, though a judge said the company would receive “considerably less” than $5 billion.
Lynch, once hailed as Britain’s answer to Bill Gates, had always maintained his innocence and blamed HP for failing to integrate Autonomy into the company.
He was acquitted of criminal charges over the deal in the US and had intended to appeal the High Court’s 2022 ruling, a process which was on hold pending today’s decision on damages.
Judge Robert Hildyard ruled that HP would have paid £23 a share, rather than the £25.50 it actually paid, when it bought Autonomy.
HP had been seeking up to $4 billion, its lawyers said at a hearing last year. Hildyard said in his ruling that the value of HP’s claim “was always substantially exaggerated”.
