Mike Lynch’s estate ordered to pay HP £700m following tech mogul’s death
Former tech entrepreneur Mike Lynch’s estate was ordered to pay Hewlett Packard Enterprise (HP) just under £700m in conclusion to the fraud linked to the $11.1bn sale of Autonomy.
Lynch founded software firm Autonomy in 1996 and, along with Autonomy’s former chief financial officer, Sushovan Hussain, he went on to sell the firm to HP in 2011.
At the time, the deal was the largest-ever takeover of a British technology business.
However, HP went on to sue Lynch and Hussain in the High Court over claims they artificially inflated Autonomy’s reported revenues, growth and gross margins.
The lengthy piece of litigation went to trial in 2022 and resulted in an even longer judgement, which ruled in favour of HP. The American tech giant originally sued Lynch and Hussain for £3.7bn.
Lynch was then extradited from the UK to the US to face criminal charges in San Francisco. He pleaded not guilty, and last June, an American jury found him not guilty, acquitting him of all charges.
However, in August, Lynch, along with his daughter, Morgan Stanley International Bank chair Jonathan Bloomer, and Chris Morvillo, a partner at magic circle law firm Clifford Chance, were confirmed dead after a superyacht capsized in Sicily.
Following his death, HP was reportedly set to pursue his widow of Mike Lynch for compensation resulting from the civil litigation he lost.
On Tuesday, following a long-awaited judgement, the High Court ruled that Lynch’s estate, albeit with a significant reduction in the amount originally claimed, was to pay just under £700m to HP.
The judge did find that HP’s claim was substantially exaggerated.
A spokesperson for Lynch said: “Today’s High Court ruling reflects that HP’s original $5 billion damages claim was not just a wild overstatement – misleading shareholders – but it was off the mark by 80 per cent.”
“HP acquired Autonomy for $11.6bn and today’s judgment is a view that Autonomy’s actual value was not even 10 per cent below the price HP paid. This result exposes HP’s failure and makes clear that the immense damage to Autonomy was down to HP’s own errors and actions.”
An appeal process will be considered later this year. The English civil case included hearsay evidence from the US, and we were never able to question or cross-examine those witnesses.”
“This is in direct contrast to the rights of defendants in the US legal system. When in the US criminal trial we were able to cross examine the relevant witnesses, a very different story emerged. Why is the English legal system so trusting?,” they added.