The $4.3bn trial of the century is over! Now we wait for judgment

After 93 days in the courtroom, the $5bn Autonomy Trial has reached its end, with Mike Lynch's lawyers urging the judge to dismiss all of HPE's claims against the British software firm's former CEO. Ending with a drawn-out whimper rather than a big bang, the Autonomy trial was brought over claims by Hewlett Packard Enterprise …

[Anonymous Coward]

HPE's major hurdle

HPE just needs a believable explanation for not having KPMG complete due diligence AND not using KPMG for consulting work during the Autonomy integration.

Were HP unhappy with KPMG and replaced them? Or did HP realise the catastrophe post-acquisition and started to bury the bodies so they could provide an alternative story?

Almost all the evidence in the case from both sides has suggested the acquisition was done poorly with people you would have expected to be heavily involved either sidelined or removed by HP. The witnesses suggesting it was fraud appear to have been very unsure of details, coached by HP lawyers and actually responsible for the fraud and now looking for a scapegoat.

Perhaps if HPE does lose (IANAL so my opinion matters little...), ElReg can send Mr Corfield on an all expenses paid trip to the US to cover HPE vs shareholders: The shareholders stroke back?

[lafnlab]

It's only over until the appeals start, which is inevitable.

[Anonymous Coward]

It's only over after the appeals are done. And then there are the tell-all book deals. And the movie dramatization....

[Aladdin Sane]

Assuming that they have grounds for an appeal.

[Pascal Monett]

Of course they'll have grounds for an appeal : they'll have lost money !

[Anonymous Coward]

Shame they can't get Newman and Cruise to play Lynch and Hussain.

[Anonymous Coward]

And...

The Extradition hearings and appeals and POTUS getting into a real Tizzy and threatening UK Plc with all sorts of nasty trade sanctions and ... and ... and ...

Let's face it people. The USofA is a bully. Even more with old orange face (apparently due to LED lighting) in the Whitehouse.

Posting AC otherwise I'd be inviting the Black Helicopters to come calling.

[Nunyabiznes]

Dream judgement

You all suck. Each of the principal officers involved from both sides will give one years total compensation to charity. Said officers are banned from C-level positions for 5 years for incompetence and/or lack of ethics.

[Throatwarbler Mangrove]

Re: Dream judgement

I stand by my previous request for summary execution of random executives from both sides.

[Psmo]

Re: Dream judgement

I would agree, but for some of them that's tax-deductible.

[BebopWeBop]

Re: Dream judgement

So win win?

[Version 1.0]

Re: Dream judgement

Sure, they will set up their own charities.

[John Brown (no body)]

Re: Dream judgement

"I would agree, but for some of them that's tax-deductible."

Is that the Hotblack Desiato Doctrine?

[LeahroyNake]

Reserve judgement

For around four months. I guess there is a mountain of paperwork to review, but four months :0

My preliminary judgment is HP are full of it and their case should have been dismissed way before now. What a waste of money.

[Danny Boyd]

Re: Reserve judgement

Why is it a waste? Will somebody think of the lawyers?!

[eldakka]

Re: Reserve judgement

For around four months. I guess there is a mountain of paperwork to review, but four months :0

Sure, if the judge had nothing else to do, could dedicate 100% of his time to this case then yes, it could get done in much less than 4 months.

However, it doesn't work like that. The Judge's other cases, and new cases coming along, don't all get put on hold until he has completed his review and issued his judgement. The Judge may have other trials he is still deciding on, and will other trials to oversee during that time as well.

[Doctor Syntax]

I'm still trying to get my head round the idea that the closing statements have been made but expert evidence can and will be taken later.

[David Hicklin]

The article does say "taken earlier in the case"

[Rich 10]

It ain't over until the lawyers have milked HP and all out of more money than the cost of the write down in question. Expect appeal after appeal after appeal, and then a long drawn out settlement process - what I want to see is the Autonomy execs found guilty, and the judge award HP $1 or 1 pound sterling.

[Anonymous Coward]

Autonomy Execs found guilty

would lead to even more pressure to extradite them and face 125 years in jail for their crimes.

Just like Tyson Fury said this week, 'Foreigners can't win in the USA unless it is by a knockout'. MAGA and all that USA No 1 etc.

[Skoorb]

Remember, this is a UK court - not US, you generally can't just appeal for ever.

[cpm86]

El Reg's coverage of this has been fantastic.

Astounding will have been the UK taxes paid by the City lawyers for their well deserved fee income.

The role of UK financial institutions in contributing to our economy is well recognised. We also have a world class legal system in the City that day in, day out settles arguments across the world and pays for much of our public spending.

( Declaration - I am not a lawyer or involved in such matters except for having paid vast sums to such City practitioners in the past.)

[BebopWeBop]

If the lawyers are up to scratch they will ensure that taxes collected are minimal.

[dervheid]

Can't believe

that this is even a thing.

This may be over simplistic, but

Company 'A' buys Company 'B'

Company 'A' discovers Company 'B' not worth what it thought.

Company 'A' blames former *owners* of Company 'B', not Company 'C' who were employed by Company 'A' to check value of Company 'B'

IMO & IANAL, I cannot see how the former *owners* of Company 'B' are to blame, even if they *did* make Company 'B' appear to be worth more.

Surely that blame falls to either Company 'C' or is a case of Company 'A' failing to observe the old adage "Caveat Emptor"

[Mongrel]

Re: Can't believe

"Company 'A' blames former *owners* of Company 'B', not Company 'C' who were employed by Company 'A' to check value of Company 'B' "

Not forgetting that Company 'A' jumped the gun on buying Company 'B' by not waiting for Company 'C' to actually finish their job and hand in their report

[Anonymous Coward]

Re: Can't believe

Not forgetting, also, that every man and his dog, aka the trade press and analysts, unanimously said that Company B wasn't worth what Company A announced they were going to pay.

[Grooke]

Re: Can't believe

Agree with everything except:

"even if they *did* make Company 'B' appear to be worth more."

Fraud is fraud. "They should have figured out we were committing fraud" is no defense.

[Aristotles slow and dimwitted horse]

Are we going to take bets on the outcome?

I'm still rooting for a Lynch win on this, but I'm wondering if partly relying on the "Deloitte signed it off" argument is as strong as is being presented. As we have seen in very recent history and on multiple occasions, and as the entire world saw with Andersens in the Enron case; all 4 of the big audit firms would willingly sign off on the feeding of their mothers to the now legendary Bugblatter Beast of Traal if it meant that they got their "professional fees" paid.

Still, HP lol!!! What a bunch of asshats. I really do hope we get a reply of Leo's testimony... that was utterly hilarious.

[Gordon 10]

Re: Are we going to take bets on the outcome?

I think a better reliance than Deloitte signed it off is that KPMG *didnt* sign off the acquisition for HP.

Everything else follows from that failure by Leo.

[I ain't Spartacus]

Re: Are we going to take bets on the outcome?

Well as a defence, if they can say we told the auditors everything and they signed off - then it's a pretty good one. Given that HP are accusing them of fraud. Also remember that, to quote Rumpole (who wouldn't of course get involved in grubby commercial work:" The defence has to prove nothing. This is the golden thread that runs through British justice, my client need say nothing and you must still let him walk free unless the prosecution can prove its case beyond reasonable doubt. Or words to that effect... Perhaps I shouldn't have bought that Rumpole omnibus from Amazon last year?

I think the due dilligence is a red herring in this case. But will play awfully in any shareholder lawsuit if this trial fails.

I think HP have to prove that Autonomy lied during the due dilligence that did happen before the sale - I believe they were surprised (i.e. stupidly underprepared) about how little info you get in acquisitions in the UK compared to how things roll in the US - but that might be where the hardware vs. software sales in the figures could matter. Though as they didn't change the accounting for the difference after they took over - that looks pretty rubbish as an argument. Plus hardware sales weren't all that big.

And in verbal evidence they were only talking about a couple of million of possible "fraud" - faking sales to partners that were actually given as freebies. And that's just not material, and in the US and if so done by a witness who got immunity in exchange for testimony he sort of admitted was partly written for him by either HP lawyers or US prosecutors.

I'm assuming there must be more in the mounds of paperwork that we haven't seen? Otherwise I don't see how this trial hasn't been a colossal waste of everybody's time? Although good for Lynch to "clear his name" given there was only the threat of money lost at stake and if HP can't prove it "on the balance of probabilities" how can criminal trial manage proof "beyond reasonable doubt" - on the same evidence?

[macjules]

Due Diligence Report

HP** did not wait for audit firm KPMG to deliver a final due diligence report before going ahead with the buyout.

I rather suspect that that will be the lynchpin ('scuse the pun) of the entire case.

[Archivist]

From the article

"over-inflating revenues"

I think you're over exaggerating.

[Daft Quant]

I'm as sick as a parrot

These scenarios crop up all the time in football. A manager spends many millions of pounds on a foreign player that he believes will be the key to the team's success (and the fans think "Why are they spending so much money on that guy?"). Sometimes it works. But all too frequently you see that player failing to live up to expectations and spending a large part of his time sitting on the bench.

Normally, however you would expect the team buying the player to bother to look at the medical report before buying. Sometimes it turns out that overpriced players are bought because the manager buying the player somehow gets a bung.

[Moosh]

"Among the tactics Autonomy is alleged to have used were funnelling cash around its favoured resellers to bulk out reported revenues; and inventing reciprocal deals so Autonomy paid for goods and services only to have that money paid straight back in a kind of cash merry-go-round."

Was this ever actually backed up by HPE? I can't recall reading anything specifically about this part. The crux appears to have been the software and hardware being lumped together.