Mike Lynch estate owes HPE $943M over Autonomy fallout
(2025/07/22)
- Reference: 1753191158
- News link: https://www.theregister.co.uk/2025/07/22/mike_lynch_hpe_damages/
- Source link:
A High Court judge has ruled that the estate of Autonomy founder Dr Mike Lynch will not have to pay the billions of dollars sought in damages by HPE following its ill-fated acquisition of Autonomy in 2011.
The ruling follows the UK civil trial in 2022, which [1]found in favor of HPE's claim that Lynch and ex-CFO Sushovan Hussain had inflated the apparent value of Autonomy during the acquisition process, leading the US megacorp to sue for $4.5 billion in damages, later amended to $4 billion.
In a lengthy court ruling published today, judge Mr Justice Hildyard laid out his reasoning, saying that HP (now HPE) had exaggerated its claims of how much it had overpaid for Autonomy, and instead put forward his own calculation over the cost of the Brit enterprise software biz.
[2]
Justice Hildyard estimated how much an "appropriate" valuation of Autonomy would have added up to if its accounts had been properly stated, and judged that the difference between that figure and the actual price paid was £697 million (about $941 million at current conversion rates).
[3]
[4]
Since the claim under the UK's Financial Services and Markets Act (FSMA) relates only to 92.6 percent of Autonomy's share capital, the loss is therefore deemed to be £646 million (about $871 million at current conversion rates).
However, the judge also ruled that HP was entitled to damages under deceit and misrepresentation claims, amounting to £50.7 million ($68 million) against Dr Lynch, plus other direct loss claims that bring the total to somewhere north of £700 million (about $943 million).
[5]
Lynch died [6]almost a year ago along with his daughter and four others in a freak storm that caused the billionaire's yacht, the Bayesian, to sink off the coast of Sicily. He was understood to be celebrating with family and friends following the outcome of the [7]US criminal trial over the Autonomy sale , in which he was cleared of all charges.
Antonio Neri, CEO of HP's successor company HPE, last year defended the firm's decision to [8]continue its $4 billion claim against Lynch's estate because it was "in the best interest of shareholders."
The IT giant had been seeking legal redress and damages ever since HP announced it was [9]taking an $8.8 billion hit to its finances in 2012, the year after the Autonomy deal closed, with $5 billion of that blamed on the UK biz allegedly misrepresenting its own value.
[10]
However, in his ruling, Justice Hildyard stated that "HP's claim was always substantially exaggerated: and I have concluded that there is more than a grain of truth in Dr Lynch's submission, in his written closing at the Main Trial that when HP announced that it was writing down the value of Autonomy by $8.8 billion and attributed some $5 billion to alleged fraud, the figure was not based on detailed analysis."
[11]70-knot winds so far blamed for yacht disaster that killed Brit tech tycoon Mike Lynch
[12]HPE CEO: 'Best interest of shareholders' to pursue $4B damages from Lynch estate
[13]HPE to pursue $4B claim against estate of Mike Lynch over Autonomy acquisition
[14]UK tech pioneer Mike Lynch dead at 59
He continued: "Rather, it was predominantly calibrated by reference to the perceived need to reduce the carrying value of some of HP's assets in order to take account of the diminution of HP's market capitalisation following a fall in HP's share price; and (to quote Dr Lynch's written closing) Autonomy was lined up to take a disproportionate hit."
Dr Lynch's legal team today released a statement written by him last year, as the damages judgment was expected in September 2024 but was then postponed by the tragic yacht incident. The statement reads:
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 percent. HP acquired Autonomy for $11.6 billion 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?
In response to today's damages judgement, HPE told The Register : "We are pleased that this decision brings us a step closer to the resolution of this dispute. We look forward to the further hearing at which the final amount of HPE's damages will be determined." ®
Get our [15]Tech Resources
[1] https://www.theregister.com/2022/01/28/hpe_multibillion_fraud_trial_mike_lynch_autonomy/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aH-1k1gSB4nstdO9_2nw6wAAAMg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aH-1k1gSB4nstdO9_2nw6wAAAMg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aH-1k1gSB4nstdO9_2nw6wAAAMg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aH-1k1gSB4nstdO9_2nw6wAAAMg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2024/08/21/mike_lynch_death/
[7] https://www.theregister.com/2024/06/06/mike_lynch_cleared/
[8] https://www.theregister.com/2024/09/16/hpe_lynch_damages/
[9] https://www.theregister.com/2012/11/20/hp_alleges_autonomy_fraud/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aH-1k1gSB4nstdO9_2nw6wAAAMg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[11] https://www.theregister.com/2025/05/15/bayesian_mike_lynch_investigation/
[12] https://www.theregister.com/2024/09/16/hpe_lynch_damages/
[13] https://www.theregister.com/2024/09/02/hpe_mike_lynch_damages/
[14] https://www.theregister.com/2024/08/21/mike_lynch_death/
[15] https://whitepapers.theregister.com/
The ruling follows the UK civil trial in 2022, which [1]found in favor of HPE's claim that Lynch and ex-CFO Sushovan Hussain had inflated the apparent value of Autonomy during the acquisition process, leading the US megacorp to sue for $4.5 billion in damages, later amended to $4 billion.
In a lengthy court ruling published today, judge Mr Justice Hildyard laid out his reasoning, saying that HP (now HPE) had exaggerated its claims of how much it had overpaid for Autonomy, and instead put forward his own calculation over the cost of the Brit enterprise software biz.
[2]
Justice Hildyard estimated how much an "appropriate" valuation of Autonomy would have added up to if its accounts had been properly stated, and judged that the difference between that figure and the actual price paid was £697 million (about $941 million at current conversion rates).
[3]
[4]
Since the claim under the UK's Financial Services and Markets Act (FSMA) relates only to 92.6 percent of Autonomy's share capital, the loss is therefore deemed to be £646 million (about $871 million at current conversion rates).
However, the judge also ruled that HP was entitled to damages under deceit and misrepresentation claims, amounting to £50.7 million ($68 million) against Dr Lynch, plus other direct loss claims that bring the total to somewhere north of £700 million (about $943 million).
[5]
Lynch died [6]almost a year ago along with his daughter and four others in a freak storm that caused the billionaire's yacht, the Bayesian, to sink off the coast of Sicily. He was understood to be celebrating with family and friends following the outcome of the [7]US criminal trial over the Autonomy sale , in which he was cleared of all charges.
Antonio Neri, CEO of HP's successor company HPE, last year defended the firm's decision to [8]continue its $4 billion claim against Lynch's estate because it was "in the best interest of shareholders."
The IT giant had been seeking legal redress and damages ever since HP announced it was [9]taking an $8.8 billion hit to its finances in 2012, the year after the Autonomy deal closed, with $5 billion of that blamed on the UK biz allegedly misrepresenting its own value.
[10]
However, in his ruling, Justice Hildyard stated that "HP's claim was always substantially exaggerated: and I have concluded that there is more than a grain of truth in Dr Lynch's submission, in his written closing at the Main Trial that when HP announced that it was writing down the value of Autonomy by $8.8 billion and attributed some $5 billion to alleged fraud, the figure was not based on detailed analysis."
[11]70-knot winds so far blamed for yacht disaster that killed Brit tech tycoon Mike Lynch
[12]HPE CEO: 'Best interest of shareholders' to pursue $4B damages from Lynch estate
[13]HPE to pursue $4B claim against estate of Mike Lynch over Autonomy acquisition
[14]UK tech pioneer Mike Lynch dead at 59
He continued: "Rather, it was predominantly calibrated by reference to the perceived need to reduce the carrying value of some of HP's assets in order to take account of the diminution of HP's market capitalisation following a fall in HP's share price; and (to quote Dr Lynch's written closing) Autonomy was lined up to take a disproportionate hit."
Dr Lynch's legal team today released a statement written by him last year, as the damages judgment was expected in September 2024 but was then postponed by the tragic yacht incident. The statement reads:
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 percent. HP acquired Autonomy for $11.6 billion 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?
In response to today's damages judgement, HPE told The Register : "We are pleased that this decision brings us a step closer to the resolution of this dispute. We look forward to the further hearing at which the final amount of HPE's damages will be determined." ®
Get our [15]Tech Resources
[1] https://www.theregister.com/2022/01/28/hpe_multibillion_fraud_trial_mike_lynch_autonomy/
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aH-1k1gSB4nstdO9_2nw6wAAAMg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aH-1k1gSB4nstdO9_2nw6wAAAMg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aH-1k1gSB4nstdO9_2nw6wAAAMg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aH-1k1gSB4nstdO9_2nw6wAAAMg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2024/08/21/mike_lynch_death/
[7] https://www.theregister.com/2024/06/06/mike_lynch_cleared/
[8] https://www.theregister.com/2024/09/16/hpe_lynch_damages/
[9] https://www.theregister.com/2012/11/20/hp_alleges_autonomy_fraud/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aH-1k1gSB4nstdO9_2nw6wAAAMg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[11] https://www.theregister.com/2025/05/15/bayesian_mike_lynch_investigation/
[12] https://www.theregister.com/2024/09/16/hpe_lynch_damages/
[13] https://www.theregister.com/2024/09/02/hpe_mike_lynch_damages/
[14] https://www.theregister.com/2024/08/21/mike_lynch_death/
[15] https://whitepapers.theregister.com/
Legal teams are rubbing their hands
Guy de Loimbard
Thinking about the enormous amounts of money to be made from an ongoing legal case.
FFS, there's plenty of blame to be bandied about, but it seems HPE are not able to accept they hold some responsibility for their own mistakes.
Due diligence anyone?
Mike Lynch
must be drowning in debt.