Antonio Neri, the former engineer turned chief executive at Hewlett Packard Enterprise, says the company has to pursue its $4 billion claim against former Autonomy boss Mike Lynch's estate because it is "in the best interest of shareholders."
HPE was deemed by High Court trial judge Mr Justice Hildyard in January 2022 to have "substantially succeeded" in its litigation against Lynch and chief financial officer Sushovan Hussain over allegations that the pair artificially hiked the value of Autonomy. HP (as it was then) shelled out $11 billion to buy the company before writing down its value to the tune of billions of dollars a year later.
In early September, HPE confirmed it intended to pursue the $4 billion in damages it had always sought following its civil trial victory – even though some onlookers felt this was a PR nightmare coming relatively soon after the tragic death of Lynch, his daughter, and four others in a freak storm that caused the billionaire's yacht, the Bayesian, to sink.
Lynch had been acquitted in June on criminal charges of fraud brought by HPE in the US, a case that had shadowed the tech entrepreneur for years. He was celebrating the win with family and friends while on holiday off the coast of Sicily when he died.
Yet, as The Register pointed out in our previous article, HPE has a fiduciary duty to shareholders – no matter how potentially unpalatable that seems under the circumstances.
"Obviously my job as a representative of shareholders is to make the difficult decisions," Neri told the Financial Times. "These are difficult decisions. But in the end, we are making decisions in the best interest of shareholders."
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Clearly the "loss of so many lives, including [that of] Dr Lynch" is a "sad story," the HPE boss added, "and obviously our thoughts are with them."
"But the reality of what happened does not change what happened in the past decade or so, where we believe wrongdoing was done, and therefore we have to see through the process with the UK judge completing his proceedings."
As we've noted, HPE opens itself up to potential litigation should it not chase financial damages from Lynch's estate. The company is incorporated in Delaware and the state's corporate law dictates that HPE would need to make a reasonable business case to take a lesser settlement.
Lawyers for HPE argued at a hearing in London in February that the business was entitled to $4 billion due to the losses recorded from the writedown, although Justice Hildyard had indicated that the damages would likely be significantly lower. That judgement is still pending.
"Remember that the judge already ruled that there was wrongdoing and it is now about what damages he will award after he completes his proceedings," said Neri. "So it is very normal to see it through."
In addition to damages, HPE has the right to ask the Lynch estate to cover its legal costs, believed to be at least £40 million ($52.8 million).
Lynch is survived by his wife, Angela Bacares, and their other daughter. ®