HP 2014 Annual Report Download - page 173

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 15: Litigation and Contingencies (Continued)
information and making false statements related to HP’s acquisition of Autonomy and the
financial performance of HP’s enterprise services business. On May 3, 2013, the lead plaintiff
filed a consolidated complaint alleging that, during that same period, all of the defendants
violated Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5(b) by concealing
material information and making false statements related to HP’s acquisition of Autonomy and
that certain defendants violated SEC Rule 10b-5(a) and (c) by engaging in a ‘‘scheme’’ to
defraud investors. On July 2, 2013, HP filed a motion to dismiss the lawsuit. On November 26,
2013, the court granted in part and denied in part HP’s motion to dismiss, allowing claims to
proceed against HP and Margaret C. Whitman based on alleged statements and/or omissions
made on or after May 23, 2012. The court dismissed all of the plaintiff’s claims that were based
on alleged statements and/or omissions made between August 19, 2011 and May 22, 2012. The
plaintiffs filed a motion for class certification on November 4, 2014 and, on December 15, 2014,
defendants filed their opposition to the motion. The hearing on the motion for class certification
is scheduled for February 20, 2015.
•In re Hewlett-Packard Shareholder Derivative Litigation consists of seven consolidated lawsuits
filed beginning 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 and the financial performance of HP’s enterprise
services business. The lawsuits also allege 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. One lawsuit further alleges that certain individual defendants
engaged in or assisted insider trading and thereby breached their fiduciary duties, were unjustly
enriched and violated Sections 25402 and 25403 of the California Corporations Code. On May 3,
2013, the lead plaintiff filed a consolidated complaint alleging, among other things, that the
defendants concealed material information and made false statements related to HP’s acquisition
of Autonomy and Autonomy’s Intelligent Data Operating Layer technology and thereby violated
Sections 10(b) and 20(a) of the Exchange Act, breached their fiduciary duties, engaged in ‘‘abuse
of control’’ over HP and corporate waste and were unjustly enriched. The litigation was stayed
by agreement until July 31, 2013. On July 30, 2013, HP filed a motion to further stay the
litigation until HP’s Board of Directors decides whether to pursue any of the claims asserted in
the litigation or the court rules on HP’s motion to dismiss the consolidated complaint in the In
re HP Securities Litigation matter. The court extended the stay of the litigation until June 16,
2014. Lead plaintiff filed a stipulation of proposed settlement on June 30, 2014. The court has
held hearings on the motion for preliminary approval of the proposed settlement, but has not
issued a decision. The parties and other interested parties have submitted further briefing and
await a ruling from the court. The court is also expected to rule on the motion to sever filed in
an additional derivative action captioned Steinberg and Vogel v. Apotheker, et. al. that contains
substantially similar allegations and seeking substantially similar relief; the motion to intervene
filed by the California state court plaintiff Vincent Ho for the limited purpose of applying for
attorneys’ fees; the motion to intervene filed by Sushovan Hussain for the purposes of objecting
to the proposed settlement and obtaining discovery; and the motion to intervene filed by
purported HP shareholder Rodney Cook for the purposes of removing the lead plaintiff and
having himself appointed as the lead plaintiff.
165