By Shira Ovide
A U.S. District Judge agreed Friday to approve preliminarily a
settlement in a lawsuit by Hewlett-Packard Co. shareholders over
the company's acquisition of U.K. software firm Autonomy.
H-P has been trying for nearly a year to settle the litigation
filed by a handful of its shareholders, who said H-P's CEO at the
time of the deal, Meg Whitman, and other current and former company
officials failed to heed warning signs about problems with
Autonomy's business. H-P acquired the software firm in 2011 for
more than $11 billion, and a year later it took an $8.8 billion
write-down on the deal.
In a court filing Friday, U.S. District Judge Charles Breyer in
San Francisco said he would consider final approval of the
settlement in a July hearing. Reuters reported the preliminary
approval earlier Friday.
If approved, the settlement would bolster H-P's effort to move
past a deal that has caused major headaches for the company. Ms.
Whitman in 2012 said H-P was duped into overpaying for Autonomy by
what she characterized as apparently willfully inflated financial
statements at the U.K. software firm. Autonomy's former CEO has
repeatedly denied accusations of improper accounting.
H-P had tried previously to put to rest the litigation first
filed in 2012. Judge Breyer balked last year at one potential
settlement, in part over what could have been a large financial
windfall for attorneys representing the shareholder plaintiffs. In
December, the judge said a revised settlement improperly protected
H-P directors, officials and professional firms from a wide swath
of potential future shareholder litigation.
This time, Judge Breyer gave the green light to a revised
settlement that would limit prohibitions on future shareholder
litigation and extend policy changes in how H-P considers future
acquisitions.
The settlement terms don't call for the defendants to pay any
money.
"We are pleased with the Court's decision to grant preliminary
approval and look forward to the final hearing on July 24," an H-P
spokeswoman said.
"The parties were able to negotiate a resolution that will
benefit H-P and its shareholders now and in the future, as H-P
implements the reforms to its acquisition policies," said an
attorney representing the lead shareholder plaintiff in the
case.
Write to Shira Ovide at shira.ovide@wsj.com
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