Hewlett Packard/Autonomy v Lynch – Claimants win on liability

The civil side of the long running dispute between Hewlett-Packard and Michael Lynch (Hewlett-Packard and othrs v Michael Richard Lynch and othrs) over the acquisition of Lynch’s business, Autonomy Corporation Limited, has been determined at the High Court in London.

The Claimants have substantially succeeded in their claims on liability. Quantum will be determined at a later date.

The background to the claims arises out of the 2012 acquisition of Autonomy from Lynch and Hussain for $11.1 billion. The key aspect of the acquisition was the IDOL technology (Intelligent Data Operating Layer) that had been developed by Lynch and which was at the heart of nearly all of Autonomy’s software. IDOL was able to make sense of structured and unstructured data for which it became a market leader.

It was the Claimants’ case that they were induced into making the acquisition by dishonest statements and omissions in Autonomy’s published information, which significantly overvalued the business and resulted in a write down of $8.8 billion. The Claimants alleged Lynch and Hussain were in breach of their fiduciary duties, in breach of FSMA and in breach of the Misrepresentation Act in light of the statements and omissions. The Court held that the claims were substantially successful.

Lynch brought a counterclaim claiming losses from the Claimants’ statements regarding the alleged wrongdoing, but the counterclaim was unsuccessful.

A decision on quantum is yet to be made. Lynch also faces extradition to the United States to face criminal proceedings.

Scott Nodder