Hewlett Packard has confirmed it will continue to pursue Mike Lynch’s family for up to $4 billion as it seeks to conclude a 13-year legal battle.
The Silicon Valley-based tech group has been at odds with Lynch since 2011, when its $11.7 billion acquisition of his Autonomy group turned sour. Hewlett Packard Enterprise (HPE) wrote down the deal’s value by $8.8 billion, citing “accounting irregularities.”
HPE, formerly known as HP, won a civil trial against Lynch in the U.K. in 2022 after a judge ruled that he was likely aware of accounting fraud at the company.
He was acquitted of fraud charges in a U.S. criminal trial in June and intended to use this verdict to appeal the civil ruling.
However, Lynch died on his wife Angela Bacares’s Bayesian superyacht in August after the boat ran into a storm. Bacares is now expected to inherit her late husband’s battle with the tech group.
There was speculation that HPE would be deterred from pursuing Lynch’s family for damages owing to the negative publicity such a move could create.
Robin Henry, partner and head of dispute resolution services at Collyer Bristow, told Fortune that HPE was stuck “on the horns of a dilemma” over whether it would be willing to face criticism for continuing with the proceedings.
However, HPE has now confirmed it will carry forward with the final stages of the trial.
“In 2022, an English High Court judge ruled that HPE had substantially succeeded in its civil fraud claims against Dr Lynch and Mr Hussain,” an HPE spokesperson told Fortune.
“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.”
After ruling in HPE’s favor in the U.K. civil trial, the judge indicated that damages would be considerably less than the $4 billion HPE sought.
The total value of Lynch’s estate is unknown, but it isn’t likely to be anywhere near $4 billion. He reportedly collected £500 million (then around $800 million) for the Autonomy deal. He set up the venture capital fund Invoke Capital in 2012 and held a 3% stake in the British cybersecurity group Darktrace at the time of his death.
As a U.S.-listed company, HPE has a fiduciary duty to act in the best interests of its shareholders. The company will be mindful of this after being sued by shareholders in the wake of its Autonomy acquisition.
The process of pursuing a defendant’s family after they die is a macabre subject, but legally, it’s very straightforward.
“Following Mike Lynch’s tragic death, his executors ‘step into his shoes,’” Oliver Embley, a partner at Wedlake Bell, told Fortune last week.
“In the UK, all legal actions against a person survive against their estate following their death. Any judgment already made, as in the case of HPE’s High Court claim against Mr Lynch, is binding on his estate.”
It means Bacares, who is grieving both Lynch and their late 18-year-old daughter, Hannah, will likely take the wheel when the judge returns to conclude damages later this year.
This story was originally featured on Fortune.com
Source Agencies
