Hewlett Packard evidently have a major law-funding slush fund judging from the $48 million they are planning to pay shareholders’ lawyers to assist in their lawsuit against Autonomy Corp executives. But the plan has been scotched by a judge who say there should be no shiedling of the company’s management in respect of a bad acquisition deal that cost HP around $8 billion. So what’s a lousy $48 million?
The lawyer fee arrangement with Cotchett Pitre & McCarthy LLP is “potentially fatal” to winning approval of a settlement that would protect Hewlett-Packard and target former Autonomy managers for investor claims over an $8.8 billion loss tied to the Autonomy purchase, U.S. District Judge Charles Breyer said today at a hearing in San Francisco.
Former Autonomy chief financial officer Sushovan Hussain, one of the executives Hewlett-Packard has said it will sue, is seeking to challenge the settlement, saying Hewlett-Packard executives shouldn’t be allowed to escape blame.
John Keker, Hussain’s attorney, told Breyer today that the agreement between HP and the Cotchett firm was a “whitewash” and an attempt to cover up wrongdoing.
“This is a joke,” Keker said. “If this was a carcass, animals would walk around it, it stinks so much.”
Executives at Hewlett-Packard and Autonomy have been sparring over who’s to blame for the 2012 writedown over the acquisition. Hewlett-Packard alleged the U.K.-based software company had accounting irregularities and that Hewlett-Packard was the victim of fraud by Autonomy management. Former Autonomy executives contend Palo Alto, California-based Hewlett-Packard was at fault.