Hewlett Packard set to pursue Mike Lynch’s widow for up to £3bn
Hewlett Packard Enterprise (HPE) is set to pursue the widow of Mike Lynch for up to $4bn (£3bn) in a continuation of its long-running claim against the UK tech mogul following his death in the Bayesian yacht disaster.
The Silicon Valley giant is poised to see through a case against Angela Bacares for money stemming from a 2022 legal ruling over its purchase of Lynch’s software firm Autonomy for $11bn (£8.4bn) in 2011.
British High Court judge Mr Justice Hildyard ruled that Lynch and his former finance chief, Sushovan Hussain, had fraudulently boosted the value of Autonomy by artificially inflating its revenues. The nine-month, £40m civil trial was one of the biggest in the UK’s history.
Following its victory, HPE filed documents earlier this year seeking $4bn (£3bn) in damages. The judge previously cautioned that the final amount awarded would likely be “substantially less” than the $5bn (£3.8bn) HPE had claimed at trial.
Lynch co-founded Autonomy in 1996 and grew it to become one of the UK’s biggest tech firms. He was made an OBE for services to enterprise in 2006.
The 2022 ruling was just one part of a more than decade-long legal battle over the sale of Autonomy that involved cases in both Britain and America.
In June, Lynch and co-defendant Stephen Chamberlain were cleared of fraud in a San Francisco court after an 11-week criminal trial brought by the US Department of Justice. Chamberlain died just days before Lynch after being struck by a car in Cambridgeshire last month.
Lynch’s legal team had planned to use the US victory to appeal the British High Court ruling. City PM approached his lawyers for comment.
HPE appears ready to risk potential negative press that could result from pursuing such a large sum from Bacares, who was on board the Bayesian and also lost her 18-year-old daughter in the wreck off Sicily.
The trip was reportedly organised to celebrate Lynch’s acquittal and ended with the deaths of seven people, including Morgan Stanley International chairman Jonathan Bloomer and Clifford Chance lawyer Christopher Morvillo, who defended Lynch in his criminal trial.
HPE said in a statement last week: “In 2022, an English High Court judge ruled that HPE had substantially succeeded in its civil fraud claims against Dr Lynch and Mr Hussain.
“A damages hearing was held in February 2024 and the judge’s decision regarding damages due to HPE will arrive in due course. It is HPE’s intention to follow the proceedings through to their conclusion.”
The firm declined to comment further on its legal plans when approached by City PM
The amount HPE could seek depends on how much Mr Justice Hildyard rules it is owed and whether the firm’s directors chose to take less than this.
Under corporate law in Delaware, the state where it is incorporated, HPE would have to make a reasonable business case for taking a lesser settlement. For example, it could try to argue that pursuing Bacares for what it is legally owed would negatively impact its reputation and share price.
This option could expose HPE to legal action from shareholders demanding it take the full amount. Still, plaintiffs would have to clear a high legal bar by proving that HPE was “grossly negligent”.
In 2015, Hewlett-Packard split into two companies: HPE, which operates data centres for business clients, and HP, which sells computers and printers.