CalPERS says HP/Autonomy shareholder settlement needs more work
The California Public Employees' Retirement System has asked a U.S. judge to reject a proposed settlement between Hewlett-Packard Co and shareholders over the computer maker's botched acquisition of Autonomy Plc.
In a letter to U.S. District Judge Charles Breyer dated Tuesday, CalPERS said the judge should not approve the deal before both sides disclose the amount of fees plaintiff attorneys would recover. As it stands, the proposed civil settlement would leave shareholders "in the dark" about one of its key terms, CalPERS said in the letter.
A CalPERS representative could not immediately be reached for comment on Wednesday. Mark Molumphy, an attorney for the shareholders, said CalPERS is merely seeking confirmation that the amount of fees will be disclosed, "which will certainly be the case."
HP announced an $8.8 billion writedown in November 2012, just over a year after buying Autonomy, and linked more than $5 billion of that 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, shareholder attorneys agreed to drop all claims against HP's current and former executives, including Chief Executive Meg Whitman, board members and advisers to the company. The company also agreed to change the way it reviews potential mergers.
Shareholder attorneys have agreed to arbitrate the amount of fees they will be awarded in the case. In a statement, HP said it hopes a fee ruling can be presented to Breyer in advance of a hearing on the settlement. "We believe the settlement provides valuable benefits to HP shareholders," the company said.
The case is In re: Hewlett-Packard Co Shareholder Derivative Litigation, U.S. District Court, Northern District of California, No. 12-06003.