HP’s $57 Million Settles Apotheker-Era Shareholder Lawsuit

Hewlett-Packard (HPQ) has plunked down $57 million to settle a class action shareholder lawsuit arising out of former chief executive Leo Apotheker’s tenure, in which the plaintiffs claimed the company defrauded investors by radically altering its longstanding business model.

The lawsuit stemmed from a strategy about-face Apotheker abruptly implemented shortly after assuming HP’s helm late in 2010, in the wake of prior chief Mark Hurd’s ouster. Apotheker, who previously had served as enterprise software SAP’s (SAP) co-chief executive, announced plans to dump HP’s nascent mobile business, sell off its PC division and, in the mother of all disasters, purchased British software vendor Autonomy for some $11.2 billion.

Those moves prompted an immediate 25 percent downturn in HP’s stock. Overall, the value of the vendor’s shares slid some 40 percent during Apotheker’s short stint, losing more than $30 million in market capitalization. For his 10 months on the job, Apotheker walked away with more than $13 million in compensation.

“HP has reached a mutually acceptable resolution through a mediated settlement,” said an HP spokesperson. As Reuters reported, the settlement, which still requires the approval of Santa Ana, Calif., U.S. District Judge Andrew Guilford, calls for HP to deposit $57 million into an escrow account within 20 days.

“We are very happy with the settlement and are glad to have achieved this recovery for the affected HP shareholders,” said Jonathan Gardner, co-lead counsel for the class, according to the Reuters account.

The plaintiffs in the case included the Arkansas Teacher Retirement System; the Labourers’ Pension Fund of Central and Eastern Canada in Oakville, Ontario; the LIUNA National Pension Fund and LIUNA Staff & Affiliates Pension Fund in Washington, D.C.; and, Union Asset Management Holding AG in Frankfurt, Germany.

HP is still battling a $1 billion class action lawsuit filed last May in a San Francisco district court by a group of investors over the bungled Autonomy acquisition. Dutch pension fund PGGM Vermogensbeheer is a lead claimant in the case, contending it lost $35 million on its HP investments.