HPE going after Mike Lynch's estate

[Single Stage to Orbit]

HPE have decided to go after Mike Lynch's estate (ie: his wife). :-(
https://www.theregister.com/2024/09/02/hpe_mike_lynch_damages/
Absolutely the wrong thing for them to do.

It's vindictive and mean-minded. I wonder who made the decision?

[chrisq]

Post by Single Stage to Orbit

HPE have decided to go after Mike Lynch's estate (ie: his wife). :-(
https://www.theregister.com/2024/09/02/hpe_mike_lynch_damages/
Absolutely the wrong thing for them to do.

It's vindictive and mean-minded. I wonder who made the decision?

Greed hath no bounds. I guess it will be the shareholders forcing
this, but the uk case has not yet been appealed, so if will take a
lot of time.

Greedy grubby, spiv company, completely devoid of it's founders
ethical values and attitudes. Just say no...

Chris

[Arne Vajhøj]

Post by chrisq

Post by Single Stage to Orbit

HPE have decided to go after Mike Lynch's estate (ie: his wife). :-(
https://www.theregister.com/2024/09/02/hpe_mike_lynch_damages/
Absolutely the wrong thing for them to do.

It's vindictive and mean-minded. I wonder who made the decision?

Greed hath no bounds. I guess it will be the shareholders forcing
this, but the uk case has not yet been appealed, so if will take a
lot of time.
Greedy grubby, spiv company, completely devoid of it's founders
ethical values and attitudes. Just say no...

Maybe the decision makers have not even understood the math.

It is not:
4 B$ ~ badwill in the UK

It is:
MIN(what court will end up with,what is left in the estate) - legal
expensenses ~ badwill in the UK

If we let my RNG produce some random numbers: court says 2 B$,
estate after taxes is 800 M$, legal cost are are 500 M$ - then
HPE is getting UK thisbad will for 300 M$.

Numbers are made up, but the relevant amount is not 4 B$.

Arne

[Single Stage to Orbit]

Post by chrisq

Post by Single Stage to Orbit

HPE have decided to go after Mike Lynch's estate (ie: his wife). :-(
https://www.theregister.com/2024/09/02/hpe_mike_lynch_damages/
Absolutely the wrong thing for them to do.

It's vindictive and mean-minded. I wonder who made the decision?

Greed hath no bounds. I guess it will be the shareholders forcing
this, but the uk case has not yet been appealed, so if will take a
lot of time.
Greedy grubby, spiv company, completely devoid of it's founders
ethical values and attitudes. Just say no...

Trouble is their Zbooks are very nice. I don't buy them new though.

[chrisq]

Post by Single Stage to Orbit

Post by chrisq

Post by Single Stage to Orbit

HPE have decided to go after Mike Lynch's estate (ie: his wife). :-(
https://www.theregister.com/2024/09/02/hpe_mike_lynch_damages/
Absolutely the wrong thing for them to do.

It's vindictive and mean-minded. I wonder who made the decision?

Greed hath no bounds. I guess it will be the shareholders forcing
this, but the uk case has not yet been appealed, so if will take a
lot of time.
Greedy grubby, spiv company, completely devoid of it's founders
ethical values and attitudes. Just say no...

Trouble is their Zbooks are very nice. I don't buy them new though.

Panasonic Toughbook here, for years. Various types, from office
hardened, to mil grade. All expensive new, but buy second user, as
I don't need latest and greatest. Very reliable, loads of options,
long battery life and really are tough as nails. A true engineer's
laptop.

<usual disclaimer etc>

Chris

[chrisq]

Post by Single Stage to Orbit

Post by chrisq

Post by Single Stage to Orbit

HPE have decided to go after Mike Lynch's estate (ie: his wife). :-(
https://www.theregister.com/2024/09/02/hpe_mike_lynch_damages/
Absolutely the wrong thing for them to do.

It's vindictive and mean-minded. I wonder who made the decision?

Greed hath no bounds. I guess it will be the shareholders forcing
this, but the uk case has not yet been appealed, so if will take a
lot of time.
Greedy grubby, spiv company, completely devoid of it's founders
ethical values and attitudes. Just say no...

Trouble is their Zbooks are very nice. I don't buy them new though.

Panasonic Toughbook here, for years. Various types, from office
hardened, to mil grade. All expensive new, but buy second user, as
I don't need latest and greatest. Very reliable, loads of options,
long battery life and really are tough as nails. A true engineer's
laptop.

<usual disclaimer etc>

Chris

[Arne Vajhøj]

Post by chrisq

Post by Single Stage to Orbit

HPE have decided to go after Mike Lynch's estate (ie: his wife). :-(
https://www.theregister.com/2024/09/02/hpe_mike_lynch_damages/
Absolutely the wrong thing for them to do.

It's vindictive and mean-minded. I wonder who made the decision?

Greed hath no bounds. I guess it will be the shareholders forcing
this, but the uk case has not yet been appealed, so if will take a
lot of time.
Greedy grubby, spiv company, completely devoid of it's founders
ethical values and attitudes.

Now it is practically a confession.

https://fortune.com/europe/2024/09/13/hewlett-packard-chief-mike-lynch-grieving-family-lawsuit/

"a ‘difficult decision’ done in ‘the best interests of shareholders’"

I don't think there is much difference between that and "greed".

Arne

[Simon Clubley]

Post by Arne Vajhøj

Post by chrisq

Post by Single Stage to Orbit

HPE have decided to go after Mike Lynch's estate (ie: his wife). :-(
https://www.theregister.com/2024/09/02/hpe_mike_lynch_damages/
Absolutely the wrong thing for them to do.

It's vindictive and mean-minded. I wonder who made the decision?

Greed hath no bounds. I guess it will be the shareholders forcing
this, but the uk case has not yet been appealed, so if will take a
lot of time.
Greedy grubby, spiv company, completely devoid of it's founders
ethical values and attitudes.

Now it is practically a confession.
https://fortune.com/europe/2024/09/13/hewlett-packard-chief-mike-lynch-grieving-family-lawsuit/

That's disgusting. :-( :-(

Post by Arne Vajhøj
"a ?difficult decision? done in ?the best interests of shareholders?"
I don't think there is much difference between that and "greed".

The best way of protecting the interests of the shareholders would have
been to do proper diligence before purchase and offer a much more
realistic price.

Can I assume that, in order to protect the shareholders, they intend to
go after the HP management who made the purchase decision in the first place
without carrying out the due diligence checks before buying Autonomy ?

No, I didn't think so. :-(

Simon.

[Arne Vajhøj]

Post by Simon Clubley
Can I assume that, in order to protect the shareholders, they intend to
go after the HP management who made the purchase decision in the first place
without carrying out the due diligence checks before buying Autonomy ?
No, I didn't think so. :-(

The acquisition was done in the very short reign of Leo Apotheker.

According to Wikpedia he got 7.2 M$ in severance pay, 3.56 M$
in shares and a performance bonus of 2.4 M$ when he was kicked out
after 10 months.

And he has done rather well as member/chairman of various
companies boards since then.

But he does not have 4 B$.

Arne

[Simon Clubley]

Post by Arne Vajhøj

Post by Simon Clubley
Can I assume that, in order to protect the shareholders, they intend to
go after the HP management who made the purchase decision in the first place
without carrying out the due diligence checks before buying Autonomy ?
No, I didn't think so. :-(

The acquisition was done in the very short reign of Leo Apotheker.
According to Wikpedia he got 7.2 M$ in severance pay, 3.56 M$
in shares and a performance bonus of 2.4 M$ when he was kicked out
after 10 months.
And he has done rather well as member/chairman of various
companies boards since then.
But he does not have 4 B$.

The point is to make an example of him for not following established
procedures and hence costing them a _lot_ of money.

That way, future executives will be less tempted to do the same thing
and hence the shareholders benefit.

These people get a _lot_ of money. They should have a level of
responsibility that matches earning that amount of money.

I wonder if HPE's plan is to try and make Mrs Lynch throw in the towel
while she is under extreme emotional stress and hence they can claim
some sort of "victory", at least in their little minds ? :-( :-(

Simon.

[Simon Clubley]

Post by Simon Clubley
I wonder if HPE's plan is to try and make Mrs Lynch throw in the towel
while she is under extreme emotional stress and hence they can claim
some sort of "victory", at least in their little minds ? :-( :-(

From https://www.theregister.com/2024/09/16/hpe_lynch_damages/ is this
little gem:

|In addition to damages, HPE has the right to ask the Lynch estate to cover
|its legal costs, believed to be at least £40 million ($52.8 million).

Also, don't forget that this legal system is the same legal system that
believed the Post Office when it said that lots of subpostmasters were
stealing from it. :-(

Simon.

[Arne Vajhøj]

Post by Simon Clubley

Post by Simon Clubley
I wonder if HPE's plan is to try and make Mrs Lynch throw in the towel
while she is under extreme emotional stress and hence they can claim
some sort of "victory", at least in their little minds ? :-( :-(

From https://www.theregister.com/2024/09/16/hpe_lynch_damages/ is this
|In addition to damages, HPE has the right to ask the Lynch estate to cover
|its legal costs, believed to be at least £40 million ($52.8 million).

It could easily be in the hundreds of millions before the case is over.

But HPE will most likely pay, because that right is most likely
not worth a cent.

What is the difference between HPE being awarded 4 B$ from an
estate worth 1 B$ and HPE being awarded 4 B$ + a few hundred M$
for legal cost from an estate worth 1 B$?

None!

That right is only worth anything if HPE get awarded so small
a restitution that the estate has money left to pay legal fees.

Arne

[Arne Vajhøj]

Post by Simon Clubley

Post by Arne Vajhøj

Post by Simon Clubley
Can I assume that, in order to protect the shareholders, they intend to
go after the HP management who made the purchase decision in the first place
without carrying out the due diligence checks before buying Autonomy ?
No, I didn't think so. :-(

The acquisition was done in the very short reign of Leo Apotheker.
According to Wikpedia he got 7.2 M$ in severance pay, 3.56 M$
in shares and a performance bonus of 2.4 M$ when he was kicked out
after 10 months.
And he has done rather well as member/chairman of various
companies boards since then.
But he does not have 4 B$.

The point is to make an example of him for not following established
procedures and hence costing them a _lot_ of money.
That way, future executives will be less tempted to do the same thing
and hence the shareholders benefit.
These people get a _lot_ of money. They should have a level of
responsibility that matches earning that amount of money.

I totally agree with that.

But unless there is a claw back clause in his contract,
then there is no way to move forward with that.

And I am a little bit puzzled that you believe that
the company should try and claw back severance/bonus
of a an ex-CEO for negligence in an
acquisition, because it may deter other CEO's from
doing the same, but you don't believe that the
company should try and claw back the gain of
company sale based on fraudulent accounting practices
from the company's CEO? The CEO avoided jail because
the court did not find it proven that he knew about the
fraudulent accounting practices, but while not knowing
is not an criminal offense, then it is still
negligence and clawing back the gain may deter other
CEO's from doing the same.

Arne

[Chris Townley]

Post by Arne Vajhøj

Post by Simon Clubley

Post by Arne Vajhøj

Post by Simon Clubley
Can I assume that, in order to protect the shareholders, they intend to
go after the HP management who made the purchase decision in the first place
without carrying out the due diligence checks before buying Autonomy ?
No, I didn't think so. :-(

The acquisition was done in the very short reign of Leo Apotheker.
According to Wikpedia he got 7.2 M$ in severance pay, 3.56 M$
in shares and a performance bonus of 2.4 M$ when he was kicked out
after 10 months.
And he has done rather well as member/chairman of various
companies boards since then.
But he does not have 4 B$.

The point is to make an example of him for not following established
procedures and hence costing them a _lot_ of money.
That way, future executives will be less tempted to do the same thing
and hence the shareholders benefit.
These people get a _lot_ of money. They should have a level of
responsibility that matches earning that amount of money.

I totally agree with that.
But unless there is a claw back clause in his contract,
then there is no way to move forward with that.
And I am a little bit puzzled that you believe that
the company should try and claw back severance/bonus
of a an ex-CEO for negligence in an
acquisition, because it may deter other CEO's from
doing the same, but you don't believe that the
company should try and claw back the gain of
company sale based on fraudulent accounting practices
from the company's CEO? The CEO avoided jail because
the court did not find it proven that he knew about the
fraudulent accounting practices, but while not knowing
is not an criminal offense, then it is still
negligence and clawing back the gain may deter other
CEO's from doing the same.
Arne

Over here in the UK, we have a legal principle of Caveat Emptor

[Arne Vajhøj]

Post by Chris Townley

Post by Arne Vajhøj
And I am a little bit puzzled that you believe that
the company should try and claw back severance/bonus
of a an ex-CEO for negligence in an
acquisition, because it may deter other CEO's from
doing the same, but you don't believe that the
company should try and claw back the gain of
company sale based on fraudulent accounting practices
from the company's CEO? The CEO avoided jail because
the court did not find it proven that he knew about the
fraudulent accounting practices, but while not knowing
is not an criminal offense, then it is still
negligence and clawing back the gain may deter other
CEO's from doing the same.

Over here in the UK, we have a legal principle of Caveat Emptor

That principle is not UK specific.

But I don't think it is relevant.

It means that buyer can not sue seller related to information
buyer did not ask for.

It does not mean that buyer can not sue seller related to
fraudulent information provided.

As https://en.wikipedia.org/wiki/Caveat_emptor state:

<quote>
Under the principle of caveat emptor, the buyer could not recover
damages from the seller for defects on the property that rendered the
property unfit for ordinary purposes. The only exception was if the
seller actively concealed latent defects or otherwise made material
misrepresentations amounting to fraud.
</quote>

And the UK high court has decided that it was fraud.

https://www.bbc.com/news/uk-england-cambridgeshire-60170510

<quote>
HP sued its founder and former chief financial officer, claiming they
"artificially inflated Autonomy's reported revenues, revenue growth and
gross margins".

Mr Justice Hildyard said HP had "substantially won" its case.
</quote>

https://www.theguardian.com/business/2022/jan/28/hewlett-packard-wins-civil-case-against-mike-lynch-over-autonomy-sale

<quote>
Hewlett-Packard has won its six-year civil fraud case against Mike
Lynch, the man once hailed as Britain’s answer to Bill Gates, after a
high court judge ruled that he duped the US firm into paying £8.2bn for
his software firm Autonomy.

Lynch, who was on Friday waiting to find out if he could be extradited
to the US to face a separate criminal trial, was found to have defrauded
HP by manipulating Autonomy’s accounts to inflate the value of the
company. He has always denied the accusation and said on Friday that he
would appeal.

“Claimants have substantially succeeded in their claims in this
proceeding,” said Mr Justice Hildyard, after a 93-day trial during which
28,000 documents were considered as evidence..

He said the damages were likely to be significantly less than the $5bn
claimed by Hewlett-Packard (HP) and successor companies, while he also
cast doubt on the reliability of some of the US firm’s witnesses.

However, he ruled that HP had been induced into overpaying for the
takeover, due to fraud perpetrated by Lynch and Autonomy’s former
finance director, Sushovan Hussain, who is in jail in the US after being
found guilty of fraud relating to the same deal .
</quote>

I assume that Mr Justice Hildyard has heard about caveat emptor. But
did not consider it a valid defense.

Arne

[Simon Clubley]

Post by Arne Vajhøj
Lynch, who was on Friday waiting to find out if he could be extradited
to the US to face a separate criminal trial, was found to have defrauded
HP by manipulating Autonomy?s accounts to inflate the value of the
company. He has always denied the accusation and said on Friday that he
would appeal.

This is the same legal system that said hundreds of innocent people were
ripping off the Post Office and then proceeded to destroy their lives.
Since the details of that became fully public, my opinion of our legal
system in related matters has taken a massive nosedive.

Post by Arne Vajhøj
?Claimants have substantially succeeded in their claims in this
proceeding,? said Mr Justice Hildyard, after a 93-day trial during which
28,000 documents were considered as evidence..
He said the damages were likely to be significantly less than the $5bn
claimed by Hewlett-Packard (HP) and successor companies, while he also
cast doubt on the reliability of some of the US firm?s witnesses.
However, he ruled that HP had been induced into overpaying for the
takeover, due to fraud perpetrated by Lynch and Autonomy?s former
finance director, Sushovan Hussain, who is in jail in the US after being
found guilty of fraud relating to the same deal .

Annoying how the fact that HP never even completed the expected due
diligence before purchase doesn't enter into this decision.

Also, the numbers don't add up. From:

https://www.cio.com/article/304397/the-hp-autonomy-lawsuit-timeline-of-an-ma-disaster.html

the claim is that Autonomy overstated its revenue by US$700 million yet
HP did a multi-billion USD writedown. HP massively overpaid for Autonomy
and are trying to deflect blame away from their massive screwup in both
overpaying and not even waiting for the due diligence to be completed.

How do you get from a $700 million fraud claim to a $5 billion+ writedown ?

Simon.

[Arne Vajhøj]

Post by Simon Clubley

Post by Arne Vajhøj
Lynch, who was on Friday waiting to find out if he could be extradited
to the US to face a separate criminal trial, was found to have defrauded
HP by manipulating Autonomy?s accounts to inflate the value of the
company. He has always denied the accusation and said on Friday that he
would appeal.

This is the same legal system that said hundreds of innocent people were
ripping off the Post Office and then proceeded to destroy their lives.
Since the details of that became fully public, my opinion of our legal
system in related matters has taken a massive nosedive.

Maybe.

But you should expect the judges to have a much better understanding
of century old principles for buying and selling goods than of
how poor quality software can be.

Post by Simon Clubley

Post by Arne Vajhøj
?Claimants have substantially succeeded in their claims in this
proceeding,? said Mr Justice Hildyard, after a 93-day trial during which
28,000 documents were considered as evidence..
He said the damages were likely to be significantly less than the $5bn
claimed by Hewlett-Packard (HP) and successor companies, while he also
cast doubt on the reliability of some of the US firm?s witnesses.
However, he ruled that HP had been induced into overpaying for the
takeover, due to fraud perpetrated by Lynch and Autonomy?s former
finance director, Sushovan Hussain, who is in jail in the US after being
found guilty of fraud relating to the same deal .

Annoying how the fact that HP never even completed the expected due
diligence before purchase doesn't enter into this decision.

That is not relevant when there is fraud.

Post by Simon Clubley
https://www.cio.com/article/304397/the-hp-autonomy-lawsuit-timeline-of-an-ma-disaster.html
the claim is that Autonomy overstated its revenue by US$700 million yet
HP did a multi-billion USD writedown. HP massively overpaid for Autonomy
and are trying to deflect blame away from their massive screwup in both
overpaying and not even waiting for the due diligence to be completed.
How do you get from a $700 million fraud claim to a $5 billion+ writedown ?

HP write down was actually 8.8 B$ - and they claim 5 B$
(elsewhere it is stated as 4 B$, the judge could decide on a
significant lower amount). So HP is really saying that
they lost 5/4/X B$ due to fraud in the numbers they got and lost
3.8/4.8/8.8-X B$ due to overpaying even if the numbers had been correct.

But back to the main question.

The 700 M$ and 5 B$ is not the same type of number.

You need to distinguish between:

revenue = sale
profit = profit margin * revenue
value = accumulated expected profit from now to eternity discounted with
interest rate

There is nothing surprising in that a delta value is bigger than
a delta revenue.

It would be surprising if it was not.

Arne

[Dave Froble]

Post by Chris Townley

Post by Arne Vajhøj

Post by Simon Clubley

Post by Arne Vajhøj

Post by Simon Clubley
Can I assume that, in order to protect the shareholders, they intend to
go after the HP management who made the purchase decision in the first place
without carrying out the due diligence checks before buying Autonomy ?
No, I didn't think so. :-(

The acquisition was done in the very short reign of Leo Apotheker.
According to Wikpedia he got 7.2 M$ in severance pay, 3.56 M$
in shares and a performance bonus of 2.4 M$ when he was kicked out
after 10 months.
And he has done rather well as member/chairman of various
companies boards since then.
But he does not have 4 B$.

The point is to make an example of him for not following established
procedures and hence costing them a _lot_ of money.
That way, future executives will be less tempted to do the same thing
and hence the shareholders benefit.
These people get a _lot_ of money. They should have a level of
responsibility that matches earning that amount of money.

I totally agree with that.
But unless there is a claw back clause in his contract,
then there is no way to move forward with that.
And I am a little bit puzzled that you believe that
the company should try and claw back severance/bonus
of a an ex-CEO for negligence in an
acquisition, because it may deter other CEO's from
doing the same, but you don't believe that the
company should try and claw back the gain of
company sale based on fraudulent accounting practices
from the company's CEO? The CEO avoided jail because
the court did not find it proven that he knew about the
fraudulent accounting practices, but while not knowing
is not an criminal offense, then it is still
negligence and clawing back the gain may deter other
CEO's from doing the same.
Arne

Over here in the UK, we have a legal principle of Caveat Emptor

There is two sides, at least, to that.

The buyer should know what he is buying, and that is his responsibility,
including making sure the seller is being honest.

Then again, a seller being fraudulent, should not be tolerated.

Not that I know much, but I thought HP was at fault. Then again, there is the
old "reach for a lawyer" that is sort of despise.

[Simon Clubley]

Post by Dave Froble
There is two sides, at least, to that.
The buyer should know what he is buying, and that is his responsibility,
including making sure the seller is being honest.

It's called due diligence and in an act of corporate stupidity, HP utterly
failed to properly carry out these standard (and expected) checks.

Post by Dave Froble
Then again, a seller being fraudulent, should not be tolerated.
Not that I know much, but I thought HP was at fault. Then again, there is the
old "reach for a lawyer" that is sort of despise.

The main problem is that HP failed to do the standard due diligence checks
before making what turned out to be a massively over-priced offer.

If HP had waited, then the auditors would have been able to build a more
accurate picture of what Autonomy was really worth after any underlying
problems had been found, and HP would have made a lower but more accurate
offer.

Now HP want the money back that they overpaid due to their own stupidity
and are trying to make it sound like it wasn't their fault for not doing
the standard checks they were supposed to do in the first place.

Simon.

[Scott Dorsey]

Post by Single Stage to Orbit

HPE have decided to go after Mike Lynch's estate (ie: his wife). :-(
=20
https://www.theregister.com/2024/09/02/hpe_mike_lynch_damages/
=20
Absolutely the wrong thing for them to do.

It's vindictive and mean-minded. I wonder who made the decision?

Carly doesn't work there anymore.
--scott

[Dave Froble]

HPE have decided to go after Mike Lynch's estate (ie: his wife). :-(
https://www.theregister.com/2024/09/02/hpe_mike_lynch_damages/
Absolutely the wrong thing for them to do.
Simon.

Why not? Isn't that why they sank his boat?

Just another conspiracy theory ...

:-)