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HP must defend $9 billion write off

by on27 November 2013

Court case calls Meg to the stand

Senior executives at the maker of expensive printer ink, HP will have to testify in a case which claims they misled shareholders over a $9 billion write off.

Senior District Judge Charles Breyer issued his ruling in San Francisco federal court although also dismissed claims against five other former HP directors and executives including former CEO Leo Apotheker. Apotheker was the bloke who brokered the acquisition of the British company Autonomy. The securities class action against HP and its executives was brought last November by investors including lead plaintiff PGGM Vermogensbeheer which had shares in HP.

Ordering HP and Whitman to defend the action, Judge Breyer took issue with the plaintiffs' arguments in the 20-page ruling saying that so far the complaint has failed 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.

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.

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