Note: This story has been updated with information about additional lawsuits.
In the continuing saga of Hewlett-Packard Co. and Autonomy Corp., the head of Autonomy's content management unit said November 29 that he hopes to improve transparency for customers in the wake of financial scandal allegations but otherwise it's business-as-usual.
"I think we need to do more in terms of cutting through the noise and reaching out," said Neil Araujo, general manager, enterprise content management.
Autonomy makes software to manage, search, and perform e-discovery on unstructured data. HP acquired it last year for $11.1 billion, but HP executives this month accused former Autonomy leaders of intentionally and artificially inflating the company's worth.
Araujo has a long history with the company. He joined Autonomy when it acquired his previous employer, Interwoven Inc., in 2009. Interwoven had acquired iManage Inc. in 2003, which Araujo co-founded in 1995. As a result, he's known many current customers for more than 10 years, both on a personal and professional basis, he said. "They've been extremely supportive." But predictably, Araujo would not comment on whether he knew of accounting concerns at Autonomy prior to HP's accusations, which were announced on November 20.
The turmoil began in August 2011. First, HP announced its intention to acquire Autonomy for $10.3 billion, despite questions from investors about whether it was prudent, because HP historically was a hardware company. Software giant Oracle Corp. publicly mocked the price HP paid for Autonomy, and then paid much less for Endeca, a similar company. Meanwhile, HP executives were questioned by analysts and investors for suggesting an exit from the personal computer and mobile device businesses. Next, CEO Léo Apotheker lost his job, Meg Whitman replaced him, and HP leadership decided to retain the personal computer unit. Autonomy deal completed in October 2011 for $11.1 billion.
Flash forward: HP's corporate situation worsened after several investors filed lawsuits accusing HP and related plaintiffs of making misleading statements and not acting for investors' best interests:
Allan Nicolow sued HP on November 26, and named Whitman, Apotheker, CFO Catherine Lesjak, and senior vice president James Murrin as co-defendants. Nicolow is seeking class-action status for HP shareholders and is represented by Robbins Geller Rudman & Dowd, known for plaintiff recovery cases.
Ernesto Espinoza filed on November 27 against the same as Nicolow, adding Autonomy founder Michael Lynch; HP board members; and advisory firms Barclays Capital, Deloitte, KPMG, and Perella Weinberg Partners UK. Espinoza is represented by Robbins Umeda, which was involved in previous litigation against HP. The firm also represents Phillip Ricciardi who filed a suit similar to Espinoza's.
Real estate firm Newman Ferrara issued a press release on Nov. 27 stating that it's also seeking class-action status, although associate Roy Shimon said Friday no suit has been filed. Shimon declined to elaborate on the discrepancy.