"HP's decision to buy Autonomy effectively took $10Bn, piled it up and burned it."
ER no, it put it in Mike Lunch's pocketsesss and any other autonomy shareholders pockets.
Or parties Autonomy may have 'hired' as 'consultants'
Consider the following hypothetical problem.
You are running a large publicly owned company along with some fellow directors.
The shareholders get irritated if you pay yourselves more than a couple of million. The plebs. However they get very excited if you spend their money on something else.
So you go scouting for a 'story' This 'story' should be something that will superficially boost the share price of your employers. Because as directors you all have shares and share options. It only has to do it long enough to allow you to sell. The the share price can collapse and you buy back in.
You need a willing partner. So you find a firm which is more or less owned by one or two guys. Its books merely need look reasonable. They can be cooked in the short term goodwill written up as having real value as can IP. Whatever.
You make the acquisition. The lawyers underwriters financial advisers and accountants all make good money. The little firm makes good money. Your stock soars, you sell shares and the share price slowly drifts back.
That's what happened to me, anyway. Although it took a bit of time to realise what was going on. Then I sold my shares too and shut up.
The following I didn't think of at the time.
But what's this? You have been outsmarted by the little firm? how DARE they do what you were doing, make their own story and sell it to you? And you haven't a leg to stand on. You did the due diligence, but you asked the guys not to look to hard didn't you? In case you didn't get your 'story for the markets'. Now you have been out-sharked by a piranha! Instead of gradually writing down the useless asset over ten years, you've written 90% of it off in year one! and your stock is in free fall. You can't sell now! Worse, people are beginning to question your competence!
You are truly shafted. IF you start blaming the auditors, they probably have documentary evidence telling them to 'not look to hard' on your instructions.
If you blame the company you bought, it makes your due diligence look incompetent, and therefore you.
What you want is a three year long lawsuit that ends up with no one actually being any the wiser, in which time you may be able to burnish your tarnished reputation...