A California federal judge has ordered Hewlett-Packard Co and Chief Executive Meg Whitman to defend a securities shareholder class action that claims they knew statements about HP's acquisition of software company Autonomy were misleading.
At the heart of the lawsuit are claims that HP, its executives and directors made misleading statements about the acquisition of the British company, bought in 2011 for $11.1 billion, and the subsequent write-down of roughly $9 billion of HP's assets.
Senior District Judge Charles Breyer issued his ruling in San Francisco federal court on Tuesday. The ruling also dismissed claims against five other former directors and executives of the information technology supplier, including one-time CEO Leo Apotheker.
The securities class action against HP and its executives was brought last November by investors including lead plaintiff PGGM Vermogensbeheer B.V., a Dutch pension administrator operating in the healthcare and social work sectors.
Though ordering HP and Whitman to defend the action, Judge Breyer took issue with the plaintiffs' arguments in the 20-page ruling.
"The complaint fails to establish any coherent motive as to why defendants would knowingly purchase a company for several times its actual value or that they knew Autonomy's accounting was problematic," said Breyer.
The judge also limited the claims that can be brought against Whitman and HP. Breyer said that the investors' claims against the company and its CEO are limited to the period after May 23, 2012, not before.
Lawyers for HP, Whitman, the plaintiffs and the other HP defendants did not respond to requests for comment.
© Thomson Reuters 2013
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