back to article If you can't nail Mike Lynch with fraud claim, judge asks HPE, can he score a win over you?

Ex-Autonomy CEO Mike Lynch’s counterclaim against HPE, amid their ongoing legal battle over HP's ill-fated $11bn acquisition of Autonomy in 2011, will fail – because it was filed against the wrong legal entity, HPE’s barrister boldly claimed in court this afternoon. Stating that Lynch’s £121m ($160m) counterclaim was in actual …

  1. Doctor Syntax Silver badge

    "Someone ... snored out loud halfway through, being clearly heard throughout the courtroom... it came from the general direction of Lynch and Hussain's legal teams."

    Was it a variation on Rumpole's trick of tearing up a newspaper during the prosecution's address to the jury?

  2. David 164

    How many legal entities are there, I honestly lost count.

    Anyway if Lynch lawyers are falling asleep they can't see HPE argument as very interesting, neither do I.

  3. Nick Kew Silver badge
    Coat

    Danger money

    Sleeping is not merely a highly skilled job, but one that opens the sleeper to a risk of public ridicule. No wonder those trial lawyers command the huge fees.

  4. Anonymous Coward
    Anonymous Coward

    So...

    Is it's safe to assume both sides are losers...

    Regardless of the outcome of the case. Although probably because of that too.

    Bring on round 3 (I think...) - shareholders vs HP (or whatever the legal entity may be called).

    1. David 164

      Re: So...

      I wonder does HP and shareholders deal still stand if HP lose the case and Lynch wins his. An what would happen in extradition case given he has been found not guilty in the UK

  5. lglethal Silver badge
    Facepalm

    So correct me if I'm wrong - HPE's argument is that Lynch's counter suit has been made against Autonomy even though it was HPE making the statements. Which is fine I guess, Lynch should sue the correct people. But then, why are Autonomy the ones suing Lynch and not HPE? Since it is HPE who are the ones that lost money, not Autonomy. So if the correct people were suing Lynch, he would be countersuing the correct people. Seems pretty clear to me...

    *rolleyes*

    1. Cuddles Silver badge

      "So correct me if I'm wrong - HPE's argument is that Lynch's counter suit has been made against Autonomy even though it was HPE making the statements. Which is fine I guess, Lynch should sue the correct people. But then, why are Autonomy the ones suing Lynch and not HPE? Since it is HPE who are the ones that lost money, not Autonomy. So if the correct people were suing Lynch, he would be countersuing the correct people. Seems pretty clear to me..."

      As I understand it, the problem is that the entity suing Lynch did not previously exist. As the article notes, it's not actually Autonomy suing Lynch, since it no longer exists, but rather ACL Netherlands BV, which it the subsidiary set up by HP containing all the assets they acquired from Autonomy. The statements Lynch is suing over, on the other hand, were made by HP before ACL Netherlands existed. So the argument goes that he can't be making a legitimate counterclaim, because the entity suing him did not exist when the comments he is suing over were made.

      The problem comes with the specifics of what a counterclaim is - it's a claim made by the defendant in a lawsuit specifically in response to that suit, and in which both suits are resolved as a single case. Lynch could start an entirely separate case against HP if he wanted to, alleging that their defamation harmed him, and that would be fine. But because he's brought it specifically as a counterclaim to an existing suit against him, it becomes quite important exactly which entity is suing him and which made the comments he wants to sue over.

      1. lglethal Silver badge
        Thumb Up

        It's extremely interesting (following a similar line of thought) that an entity that didnt exist when the sale went through can sue for losses suffered through said sale, involving two other entities, of which at the time of sale, it was not a party to. It has only recently (and much past the date of sale) become a party to this little discussion.

        As it didnt exist at the time, it is interesting that it can from a legal definition be shown to have suffered a loss. Or to have any standing in the case, since it wasnt a party to the sale in the first place.

        Only in law can the illogical become the logical...

      2. Deckard_C

        As far as I can tell "ACL Netherlands BV" only came into existance in 2017 and the assets transferred in 2017.

        https://translate.google.com/translate?hl=en&sl=nl&u=https://drimble.nl/bedrijf/amstelveen/k68103271/acl-netherlands-bv.html&prev=search

        Yet Lynch got sued in 2015 and counterclaimed in 2015 https://www.theregister.co.uk/2015/03/31/hp_autonomy_lawsuits/

        So was the creation of "ACL Netherlands BV" purpose to try to avoid the counterclaim? and how can that work?

        1. Nick Kew Silver badge

          Speculating here, but changes in 2017 were probably part of the sale of HPE to Micro Focus. They could have inherited a big dispute: that would presumably be part of the negotiations at the time.

          What lawyers say in court always needs to be taken with a generous pinch of salt. A lawyer is, after all, merely the combination of an actor's performance with a prostitute's clientele.

      3. EveryTime Silver badge

        Which makes me wonder if this is a bit of a trap, or simply an own-goal for HP (or rather one of its low-tax aliases).

        And speaking about off-shore aliases, this is another case where I have to wonder why they aren't conducting the lawsuit in the same country that the companies are registered in, and are "paying taxes" (often minimally) in? Courts regularly apply the laws of foreign jurisdictions, it's not a new concept. It appears that the companies want the tax dodge when it comes to paying, but they still want a well-funded court system when it comes to legal fights.

  6. Mage Silver badge
    Meh

    One thing is sure.

    The legal profession will make a profit from this.

    If it *WAS* only curiously creative accounting, will shareholders sue someone (who?) for not doing proper due diligence?

    1. hottuberrol

      Re: One thing is sure.

      ""If it *WAS* only curiously creative accounting, will shareholders sue someone (who?) for not doing proper due diligence?""

      I believe HPE has already reached a settlement with the investment banks and/or consulting firms who undertook due diligence and prepared the numbers for HPE. Happy to be corrected on that point.

      1. Anonymous Coward
        Anonymous Coward

        Re: One thing is sure.

        Do you have any references? My understanding is that shareholder class action relating to the purchase is on-hold pending the outcome of the fraud trials rather than settled.

        The only settlement so far has been HP paying investors who purchased shares between the finalisation of the deal and the announcement of the fraud to the market: https://www.hpe.com/us/en/newsroom/press-release/2017/03/hp-settlement-of-autonomy-related-securities-litigation.html

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