SAN FRANCISCO (AP) — An $11 billion acquisition that backfired on Silicon Valley pioneer Hewlett Packard greater than a decade in the past might be resurrected Monday throughout a trial that can discover whether or not the deal was an unlawful rip-off or a case of botched administration.The felony trial in San Francisco federal courtroom revolves round HP’s acquisition of British software program maker Autonomy, a deal that was celebrated as coup when it was introduced in 2011, solely to explode right into a pricey debacle. Earlier than HP wrapped up the deal, Meg Whitman was employed to be CEO of the corporate began 85 years in the past by Invoice Hewlett and Dave Packard in a Palo Alto, California, storage that has develop into a Silicon Valley shrine.Whitman, who rose to fame and fortune whereas operating on-line commerce web site eBay in its adolescence, had hoped the Autonomy deal would bolster her efforts to elevate HP out of the doldrums, however as an alternative it grew to become an albatross that dragged the corporate down.
As HP’s fortunes continued to sag, Whitman laid off 1000’s of employees and ultimately engineered a breakup that break up the storied firm into two entities in 2015. She stepped down as CEO of the spun-off firm, Hewlett Packard Enterprises in 2018.
The alleged villains within the trial are former Autonomy CEO Mike Lynch, who as soon as was lionized as shining instance of British ingenuity, and Stephen Chamberlain, Autonomy’s former vp of finance. They’re each defending themselves in opposition to 16 felony counts of fraud and conspiracy in a trial anticipated to run till late Might or June and embody testimony from greater than 40 witnesses.
If convicted by a jury, Lynch and Chamberlain every might face a sentence of greater than 20 years in federal jail. Autonomy’s former chief monetary officer, Sushovan Hussain, was sentenced to 5 years in jail in 2019 after being convicted on 16 felony counts of fraud and conspiracy.
The trial concentrating on Lynch and Chamberlain can be anticipated to forged a highlight on Whitman, who dipped into her estimated fortune of $3 billion to finance an unsuccessful marketing campaign to develop into California governor because the Republican Get together nominee in 2010.Not lengthy after that political setback, Whitman joined HP’s board after which was tapped to exchange firm CEO Leo Apotheker, who had negotiated the Autonomy acquisition earlier than being changed in September 2011 simply earlier than the deal was accomplished.On the time, HP was struggling to stay related amid a technological shift to cell computing being pushed by the then-rising reputation of smartphones. The upheaval depressed demand for desktop and laptop computer computer systems, a market that had been one among HP’s monetary cornerstones. In an effort to minimize its dependence on PCs, HP snapped up Autonomy to realize possession of software program targeted on serving to companies rapidly sift by way of important data saved in e-mail, telephone information and different repositories.However HP uncovered proof that Autonomy had been cooking the books to inflate its worth after the takeover was accomplished, prompting Whitman to jot down off almost $9 billion of the acquisition value. It will additionally spur accusations of felony conduct, resulting in the indictment of Lynch and Chamberlain in 2018.
The trial was delayed throughout a civil trial in regards to the alleged fraud in London that culminated in a decide siding with HP in a 2022 ruling that indicated the damages can be lower than the $5 billion (3.9 billion kilos) that HP needed. The ultimate quantity of damages hasn’t been decided.Lynch, 58, was extradited to the U.S. final Might, and has since been dwelling beneath court-mandated restrictions in San Francisco whereas being allowed to stay out of jail on $100 million bail bond secured by $50 million in money whereas awaiting trial. Court docket paperwork estimate that Lynch made greater than $800 million on Autonomy’s sale to HP. Within the London civil trial, Lynch maintained he by no means participated in any underhanded dealings at Autonomy and painted himself as a scapegoat for a bumbling administration crew led by Whitman, who he depicted as being “out of her depth.” Lynch additionally hailed Autonomy as “one of the crucial profitable corporations England has ever produced.”
Whitman, 67, denigrated Lynch as an unstable govt whose complaints about her selections “grew to become much less and fewer targeted and grounded in actuality” earlier than she ousted him from HP in 2012. She isn’t anticipated to be known as to testify in Lynch’s felony trial, although her management of the corporate is prone to be put beneath a microscope throughout the proceedings.