The former chief financial officer of the British software company Autonomy today moved to challenge a proposed settlement of a shareholder derivative lawsuit stemming from Hewlett-Packard’s botched $11 billion acquisition of that company in 2011.
In documents filed with a U.S. Federal Court in San Francisco this morning, Sushovan Hussain moved to intervene in the case and asked a judge to reject a settlement that HP reached with shareholders last month.
In the filing, Hussain, who was Autonomy’s CFO prior to the acquisition, argues that with the proposed settlement, “HP seeks to forever bury from disclosure” the reasons behind an $8.8 billion write-down that HP took on Autonomy in the fall of 2012.
While HP has argued that Autonomy executives engaged in accounting fraud to inflate the value of the company, Hussain argues in the filing that the real cause was “HP’s own destruction of Autonomy’s success after the acquisition.”
In the filing, Hussain asks the judge to reject the settlement and to release a confidential report documenting an independent investigation conducted by a law firm hired by HP, access to records gathered for that investigation, and an unredacted copy of the original complaint in the lawsuit.
An HP spokesman in an emailed statement called Hussain’s opposition to the settlement “baseless.”
“We look forward to the day when a jury gets to hear the evidence of Mr. Hussain’s conduct,” the HP statement said. “We strongly believe that at the end of the process, the jury will conclude that Mr. Hussain engaged in a multibillion dollar fraud.”
HP announced it had reached the settlement deal on June 30, ending a negotiation process Re/code first disclosed in February. The settlement must still be approved by the judge hearing it, Charles R. Breyer.
The settlement deal proposes an end to all shareholder derivative claims against HP stemming from the Autonomy deal, and calls for law firms representing the shareholders to assist HP in the event that regulators in the U.S. or U.K. seek criminal charges against any former Autonomy executives.
While Hussain has not been involved in the case so far, he is intervening in part, the filing says because “he has been named as a putative future defendant” in a potential future lawsuit.
The proposed settlement would close the book on three lawsuits, two filed in California courts and one filed in federal court. The shareholders group sued HP in 2012 in the U.S. District Court for the Northern District of California for allegedly misleading statements about the financial health of Autonomy.
HP has claimed since late 2012 that Autonomy executives engaged in accounting improprieties that inflated the British company’s valuation ahead of its acquisition. HP paid about $11 billion for it, but later wrote down the value of the acquisition by about $5 billion as part of a larger $8 billion write-down announced in 2012. Mike Lynch, Autonomy’s founder and former CEO, has continued to argue that he did nothing wrong.
In an emailed statement, Lynch described Hussain’s motion as revealing “the depth of the corruption that permeates the settlement.”
The statement goes on:
“The lawyers who spent more than a year documenting the errors and misrepresentations of HP executives in their acquisition and integration of Autonomy have been bought off by the promise of tens of millions of dollars. HP and its executives, who squandered billions of dollars and produced a report whitewashing the whole affair, avoid answering a single question. And the shareholders who have borne the losses get nothing, and learn nothing about what really happened. Three years on shareholders deserve more than this, they deserve answers.”
The shareholders have been represented by the law firms Cotchett, Pitre & McCarthy, LLP and Robbins Geller Rudman & Dowd LLP. Mediation talks that led to the settlement agreement had been held before retired U.S. District Court Judge Vaughn R. Walker.
The plaintiffs in the case — all of whom are HP shareholders — had alleged that in her first days as HP’s CEO Meg Whitman had wanted to pull HP out of the acquisition. Prior to becoming CEO, she had held a seat on HP’s board of directors and in that capacity voted in favor of the deal.
The disastrous deal combined with disappointing earnings reports prompted HP’s board to fire then-CEO Léo Apotheker after only 11 months on the job. Whitman was appointed CEO to replace him.
The lawsuits are part of the long tail of unfinished business related to the $11 billion Autonomy deal that has dogged HP for nearly three years since it closed. HP has alleged that Autonomy had a habit of reselling computers with its software installed on them at a financial loss near the end of its fiscal quarters in order to bolster its apparent financial performance. HP also claimed Autonomy used transactions that were improper with third-party resellers to create the appearance of software license revenue.
Lynch has consistently denied all of HP’s allegations saying that he and other Autonomy executives ran the company in accordance with accounting standards in force in the U.K.
Here’s the filing.
This article originally appeared on Recode.net.