Hewlett-Packard Co. agreed to pay RM185.8 million (US$57 million) to settle a shareholder lawsuit accusing former chief executive officer Leo Apotheker of making misleading statements about operations before he was ousted.
The agreement will have “substantial monetary benefits” for the plaintiffs and is in their best interests, according to a filing yesterday in federal court in Santa Ana, California.
The lawsuit was filed on Sept. 13, 2011, after Apotheker made strategy shifts and cut sales forecasts three times. He was fired Sept. 22 of that year. Hewlett-Packard’s current CEO Meg Whitman and the company’s board were sued with Apotheker in a separate case in February by an investor alleging that mismanagement and botched acquisitions have destroyed shareholder value.
Executives’ failures resulted in mishaps including bribery probes, the hiring and firing of Apotheker and an US$8.8 billion write down in 2012 of the Autonomy Corp. acquisition, shareholder A.J. Copeland said in that complaint in federal court in San Francisco.
The personal-computer and printer maker faces other shareholder lawsuits over Autonomy. Hewlett-Packard is trying to move past a period of upheaval including declining performance and the departure of Apotheker and Mark Hurd as CEO before him. Hewlett-Packard didn’t admit any wrongdoing in the settlement.
An e-mail sent to Hewlett-Packard’s media relations office outside of normal business hours wasn’t immediately responded to. “Defendants believe that they have meritorious defences to all claims asserted,” according to the filing. Hewlett-Packard, based in Palo Alto, California, agreed to settle the lawsuit because fighting it would be protracted and expensive, according to the filing.
The case is In Re: Hewlett-Packard Company Securities Litigation, 11-cv-01404, US District Court, Central District of California (Santa Ana).