A review by a three-member committee of independent directors must be completed, and the full board must vote on its recommendations, by Jan. 17, U.S. District Judge Charles Breyer in San Francisco told company lawyers Friday.
The judge put a shareholder lawsuit on hold until that date over objections by attorneys for investors who claim the committee is dragging its feet. Shareholders also said the companys assertion that Autonomy defrauded it means the board is unlikely to join investor claims that Hewlett-Packard botched the acquisition and misled them.
I want the investigation to have been completed to the point where the committee would make a recommendation to the board, and I want the board to have acted on it, Breyer said.
Hewlett-Packard, the largest personal computer maker, acquired Britain-based software maker Autonomy for $11 billion in 2010. It alleges it was a victim of fraud because Autonomy overstated its revenue growth and prospects. Autonomys ex-chief executive officer has denied HPs claims and said the company mishandled the purchase
Hewlett-Packard is facing the shareholder lawsuit in federal court, three similar suits in state court and eight shareholder demands related to the acquisition, said Ralph Ferrara, a partner at Proskauer Rose who is advising the committee.
The committee has talked to 25 individuals, including detailed discussions with those who might have been expected to invoke their Fifth Amendment right not to testify, Ferrara said at the hearing.
None of those interviewed had invoked their right, he said. Another 30 individuals may be interviewed, including former Autonomy executives, and some interviews should be finalized within the next two weeks, he said.
This is not a futile exercise. This is not a game, Marc Wolinsky, Hewlett-Packards attorney, told the judge after shareholder attorney Joseph Cotchett said the company had investigated the Autonomy acquisition more than a year ago. The company has to weigh very serious alternatives.