02 September 2024 , 20:49
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Tech company says it will follow legal proceedings ‘to their conclusion’ after tycoon’s death last month
Hewlett Packard Enterprise has confirmed it will push ahead with a high court lawsuit against the estate of the deceased tech tycoon Mike Lynch in which it is seeking damages of up to $4bn (£3bn).
The US company said in a statement it would follow the legal proceedings “through to their conclusion” despite Lynch’s death last month when his yacht sank off the coast of Italy.
HPE won a civil claim against Lynch in the English high court in 2022, after accusing him and his former finance director Sushovan Hussain of fraud over its $11bn takeover of his software company Autonomy in 2011.
A ruling on damages is expected soon, although the judge presiding over the case, Mr Justice Hildyard, wrote in 2022 that he expected final damages to be “substantially less than is claimed”.
Lynch, 59, who was cleared in a separate criminal fraud trial over the Autonomy deal in the US in June, and his 18-year-old daughter Hannah, were among seven people who died after the Bayesian superyacht sank off the coast of Sicily last month.
HPE said: “In 2022, an English high court judge ruled that HPE had substantially succeeded in its civil fraud claims against Dr Lynch and Mr Hussain. A damages hearing was held in February 2024 and the judge’s decision regarding damages due to HPE will arrive in due course. It is HPE’s intention to follow the proceedings through to their conclusion.”
Oliver Embley, a partner at the London-based law firm Wedlake Bell, said HPE must balance legal, moral and reputational issues over whether it pursued Lynch’s estate for damages.
“They are a publicly traded company and they have a fiduciary duty to their shareholders. Legally they are obliged to act in their shareholders’ best interests, but morally continuing the claim is questionable. And from a publicity perspective it could backfire on them. Effectively they would be suing his widow and that does not look good optically,” he said.
Lynch’s widow, Angela Bacares, was onboard the Bayesian when it sank but was among 15 people who were rescued. According to the Sunday Times rich list, Lynch and Bacares’s combined wealth was £500m.
The Sunday Times first reported that HPE was poised to pursue Lynch’s widow for up to $4bn.
A representative for Lynch’s family declined to comment.
Charles Elson, founding director of the Weinberg Center for corporate governance in the US state of Delaware, where HPE is incorporated, said the company would probably be protected from a shareholder lawsuit if it declined to seek damages from Lynch’s estate. Elson said HPE would be shielded by the state’s “business judgment rule”, which protects company board decisions.
“If you make a business decision that was in good faith and were informed and careful about making it, then that decision is protected legally,” he said.