A U.S. judge cast doubt on Monday over a proposed agreement struck between Hewlett Packard Co and plaintiff shareholders to settle a lawsuit over the computing giant’s botched acquisition of Autonomy Plc.
At a hearing on Monday in San Francisco, U.S. District Judge Charles Breyer said the settlement contained a “potentially fatal” provision, under which HP would hire shareholder attorneys to pursue claims against ex-Autonomy executives. He said that provision may prevent his approving the deal.
Breyer said he would not approve the proposed fees for shareholder lawyers.
“That’s out,” he said. Additionally, Breyer said that in order to approve the remainder of the deal, the judge may have to conduct a separate inquiry into the merits of dismissing claims against HP officers, including current Chief Executive Officer Meg Whitman.
HP announced a $8.8 billion writedown in November 2012, just over one year after buying Autonomy, and linked more than $5 billion to accounting fraud and inflated financials by Autonomy executives. The British company and its executives have denied any wrongdoing.
Under the terms of the settlement reached in June, shareholder attorneys agreed to drop all claims against HP’s current and former executives, including Whitman, board members and advisers to the company.
HP, in turn, agreed to team up with the shareholder attorneys to bring claims against former Autonomy executives, including Chief Executive Michael Lynch. The shareholder attorneys stand to recoup millions in fees.
Multiple parties objected to the deal. Former Autonomy Chief Financial Officer Sushovan Hussain said in a court filing that the “collusive and unfair” settlement, if approved by Breyer, would let HP “forever bury from disclosure the real reason for its 2012 writedown of Autonomy: HP’s own destruction of Autonomy’s success after the acquisition.”
The case is In re: Hewlett-Packard Co Shareholder Derivative Litigation, U.S. District Court, Northern District of California, No. 12-06003.
This article originally appeared on Recode.net.