HP has agreed to pay US$57 million (A$61.6 million) to settle a lawsuit that accused the company's former management of defrauding shareholders by abandoning a business model it had long touted.
The lawsuit was filed after former CEO Leo Apotheker shocked investors on August 18, 2011 by announcing plans to refocus the company on business services and products.
He also revealed plans to scrap webOS, whose rights HP had obtained when it bought Palm in 2010; pay US$11.1 billion for British software company Autonomy; and possibly spin off HP's personal computer business. The company also halted sales of the TouchPad, after just seven weeks on the market.
"HP has reached a mutually acceptable resolution through a mediated settlement," HP said in a statement.
According to the proposed settlement, HP will deposit US$57 million into an interest-bearing escrow account within 20 days of getting an approval by US District Judge Andrew Guilford,
The lead plaintiffs include the Arkansas Teacher Retirement System; the Labourers' Pension Fund of Central and Eastern Canada; the LIUNA National Pension Fund and LIUNA Staff & Affiliates Pension Fund.; and Germany's Union Asset Management Holding AG.
"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.
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