Hewlett Packard boss cites ‘fiduciary duty’ to pursue lawsuit against Mike Lynch’s estate
The chief executive of Hewlett Packard Enterprises says his company has a “fiduciary duty” to pursue a civil judgment against the British billionaire tech mogul who drowned alongside his daughter and several associates last month when his luxury yacht sank off the coast of Sicily.
Antonio Neri, whose company successfully sued Mike Lynch for fraud in connection to the disastrous 2011 sale of his software company to HPE, told Bloomberg News on Wednesday: “Fundamentally, we believe the things that took place were not in the interest of the shareholders, and we need to see it through.”
HPE has asked a British judge to award it $4 billion in damages after a High Court ruled that Lynch and his former finance director, Sushovan Hussain, cooked the books at now-defunct software company Autonomy Corporation before it was acquired by the US tech giant for $11.7 billion in 2011.
HPE’s acquisition of Autonomy catapulted Lynch into the stratosphere of Britain’s wealthiest moguls.
But within a year of the deal, HPE announced an $8.8 billion write-down of Autonomy’s value — $5 billion of which was due to what it alleged were accounting improprieties.
Lynch and Hussain denied the allegations.
Hussain was eventually convicted of wire fraud and securities fraud and sentenced to five years in a US federal prison.
HPE filed suit against Lynch. The lawsuit was one of the costliest and longest legal battles ever in the UK.
In 2022, the High Court ruled in HPE’s favor.
The company has asked for $4 billion in damages, but the judge has indicated that the sum may be too high.
A decision is expected by the end of the year.
“It is HPE’s intention to follow the proceedings through to their conclusion,” the company said in a statement last week — just days after Lynch’s body was recovered from the seabed just off the coast of Italy.
Earlier this year, Lynch, who was often referred to in the UK press as “Britain’s Bill Gates,” was acquitted by a federal jury in San Francisco on more than a dozen charges including wire fraud and conspiracy related to allegations that he sought to inflate Autonomy’s sales.
On Aug. 19, Lynch, his 18-year-old daughter, Hannah, and his wife were among 22 people on board his super-yacht Bayesian when it sank just off the coast of the Sicilian town of Porticello, which was hit by a powerful tornado before dawn.
Lynch, his daughter and five others died. His wife, Angela Bacares, and 14 others — among them a one-year-old child — managed to escape the boat and make it to shore safely before the vessel ran aground.
Last week, HPE told the British newspaper Telegraph that it still intended to collect damages from Lynch’s estate despite the public perception that the company, which has a market capitalization of $33.43 billion, is showing insensitivity toward a grieving family.
Lynch and his daughter are survived by his wife, Bacares, and another daughter who was not on the ill-fated yacht.
“It was a sad situation,” Neri said of the tragic deaths, adding: “Once the judge proceeds, we will regroup and see what comes next.”
