HP 2012 Annual Report Download - page 165

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 18: Litigation and Contingencies (Continued)
statements regarding HP’s Standards of Business Conduct (‘‘SBC’’) that were false and
misleading because Mr. Hurd, who was serving as HP’s Chairman and Chief Executive Officer
during that period, had been violating the SBC and concealing his misbehavior in a manner that
jeopardized his continued employment with HP.
Autonomy-Related Legal Matters
Investigations. As a result of the findings of an ongoing investigation, HP has provided
information to the U.K. Serious Fraud Office, the U.S. Department of Justice and the SEC related to
the accounting improprieties, disclosure failures and misrepresentations at Autonomy that occurred
prior to and in connection with HP’s acquisition of Autonomy. On November 21, 2012, representatives
of the U.S. Department of Justice advised HP that they had opened an investigation relating to
Autonomy. HP is cooperating with the three investigating agencies.
Litigation. As described below, HP is involved in various stockholder litigation relating to, among
other things, its November 20, 2012 announcement that it recorded a non-cash charge for the
impairment of goodwill and intangible assets within its Software segment of approximately $8.8 billion
in the fourth quarter of its 2012 fiscal year and HP’s statements that, based on HP’s findings from an
ongoing investigation, the majority of this impairment charge related to accounting improprieties,
misrepresentations to the market and disclosure failures at Autonomy that occurred prior to and in
connection with HP’s acquisition of Autonomy and the impact of those improprieties, failures and
misrepresentations on the expected future financial performance of the Autonomy business over the
long term. This stockholder litigation was commenced against, among others, certain current and
former HP executive officers, certain current and former members of the HP Board of Directors, and
certain advisors to HP. The plaintiffs in these litigation matters are seeking to recover certain
compensation paid by HP to the defendants and/or other damages. These matters include the
following:
•Allan J. Nicolow v. Hewlett-Packard Company, et al. is a putative securities class action filed on
November 26, 2012 in the United States District Court for the Northern District of California
alleging, among other things, that from August 19, 2011 to November 20, 2012, the defendants
violated Sections 10(b) and 20(a) of the Exchange Act by concealing material information and
making false statements related to HP’s acquisition of Autonomy and the financial performance
of HP’s enterprise services business.
•Philip Ricciardi v. Michael R. Lynch, et al. is a lawsuit filed on November 26, 2012 in the United
States District Court for the Northern District of California alleging, among other things, that
the defendants violated Sections 10(b) and 20(a) of the Exchange Act by concealing material
information and making false statements related to HP’s acquisition of Autonomy. The lawsuit
also alleges that the defendants breached their fiduciary duties, wasted corporate assets and were
unjustly enriched in connection with HP’s acquisition of Autonomy and by causing HP to
repurchase its own stock at allegedly inflated prices between August 2011 and October 2012.
•Ernesto Espinoza v. Michael R. Lynch, et al. is a lawsuit filed on November 27, 2012 in the
United States District Court for the Northern District of California alleging, among other things,
that the defendants violated Sections 10(b) and 20(a) of the Exchange Act by concealing
material information and making false statements related to HP’s acquisition of Autonomy and
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