Former Autonomy Founder Mike Lynch Sues HP For $160 Million in Damages
Bloomberg Business News reports that Mike Lynch, the founder of U.K. software company Autonomy, has accused Hewlett-Packard of damaging his career with false statements, and filed a lawsuit in London today seeking at least $160 million in damages, stating he has suffered “significant reputational damage and been unable to pursue business opportunities” due to statements made by HP.
Lynch’s charges stem from HP’s acquisition of Autonomy back in October 2011 for $11.7 billion. HP subsequently charged Lynch and other executives with accounting fraud and with overstating Autonomy’s profitability. HP later wrote down Autonomy’s value by $8.8 billion.
Lynch contends that he would have earned “considerable equity gains and fees” through his new company, technology-investment firm Invoke Capital Partners, but that he was hampered by the HP’s allegations.
Since HP acquired Autonomy, Lynch has also said that HP mismanaged Autonomy, saying HP executives who created the deal were pushed out and Autonomy employees weren’t treated fairly, which affected the company’s performance.
However, Hewlett-Packard’s lawyers say 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,” according to Bloomberg Business News. According to those HP lawyers and Bloomberg Business News, Autonomy was “reselling Dell computers and counting those sales as software revenue, and some sales were fabricated through resellers.”
Despite all of these allegations, British authorities ended their investigation into potential fraudulent activity by Autonomy officials in January 2015, stating that there was “insufficient evidence for a realistic prospect of conviction.”
However, in March 2015, HP filed a lawsuit in British court against Lynch and Sushovan Hussain, former chief financial officer for Autonomy, for $5.1 billion, alleging that the two had “engaged in fraudulent activities while executives at Autonomy.” That lawsuit is still pending.
- June 2015: HP to Pay $100 Million to Settle Autonomy Shareholder Lawsuit
- August 2014: HP Accuses Autonomy Founder Michael Lynch of Fraud, Files Lawsuit
- January 2014: U.K. Fraud Office Ends HP Autonomy Investigation, but Investigation Continues in U.S.
- May 2013: Hewlett-Packard Faces $1 Billion Lawsuit from Shareholders over Autonomy Deal
- November 2012: HP Charges Autonomy Management Willfully Misled Potential Buyers, Falsely Inflated Value of Autonomy
- November 2012: HP-Autonomy War of Words Continues with New HP Statement
- October 2011: HP Completes Acquisition of Autonomy, Will Boost Enterprise Software, Cloud Offerings