Hewlett Packard Enterprise Pursues $4 Billion in Damages from Mike Lynch’s Estate

Hewlett Packard Enterprise’s Pursuit of Damages from Mike Lynch’s Estate

Hewlett Packard Enterprise (HPE) has announced its intention to continue pursuing civil fraud damages potentially totaling up to $4 billion from the estate of the late Mike Lynch, the renowned British software entrepreneur who tragically passed away last month when his yacht sank. This ongoing legal battle is a continuation of a lawsuit that has been in the courts for nearly nine years, stemming from HPE’s controversial $11 billion acquisition of Lynch’s software company, Autonomy, in 2011.

Following the acquisition, HPE accused senior executives at Autonomy of misleading them regarding the company’s financial health, leading to a staggering write-down of $8.8 billion in the company’s value. This debacle triggered a period of significant turmoil within HPE, resulting in executive turnover and ultimately the separation of the company into two distinct entities: the services-oriented Hewlett Packard Enterprise and the hardware-centric HP Inc.

In 2015, HPE initiated legal proceedings against Lynch and Autonomy’s former chief financial officer, Sushovan Hussain, in London, seeking approximately £5 billion (around $6.5 billion) in damages. Both Lynch and Hussain vehemently denied the allegations, leading to a protracted legal struggle that spanned several years and was described by presiding judge Robert Hildyard as “amongst the longest and most complex in English legal history.”

In a pivotal ruling in 2022, Judge Hildyard largely sided with HPE, setting the stage for further discussions regarding the extent of the damages. Earlier this year, in February, legal representatives from both HPE and Lynch’s camp engaged in court deliberations concerning the damages amount. It was anticipated that Lynch would appeal the ruling.

Hildyard has indicated that he expects the final damages awarded to be “substantially” less than what HPE originally sought. The judge is expected to deliver his decision in the coming months. A spokesperson for HPE stated on Monday, “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.”

In a tragic turn of events, Mike Lynch and six others—including his 18-year-old daughter, Hannah; his long-time attorney, Christopher J. Morvillo; and the ship’s cook, Recaldo Thomas—lost their lives on August 19 when their family yacht capsized in severe weather conditions off the coast of Sicily. The boating trip was intended to celebrate Lynch’s recent acquittal of criminal charges related to the acquisition.

Fifteen individuals, including Lynch’s wife, Angela Bacares, survived the incident. Investigations into the circumstances surrounding the yacht’s sinking are currently underway, with Captain James Cutfield facing a manslaughter inquiry regarding his conduct during the incident.