From InfoWorld: Hewlett-Packard has come to an agreement to pay for the sins of Leo Apotheker.
HP on Monday settled a class-action lawsuit that will see the company deposit $57 million into an interest-bearing escrow account within the next three weeks. Upon deposit, US District Court judge Andrew Guilford will approve the settlement.
Reuters earlier reported on the settlement.
The class-action lawsuit was brought before HP by a handful of pension funds and asset-management companies that complained of the company's rash decision-making in 2011 that left investors stunned and a roadmap HP had been promoting for years tossed out in a single day.
The fateful day was August 18, 2011, when former CEO Leo Apotheker announced plans to kill WebOS, an operating system that HP had acquired from Palm and had integrated into its mobile device portfolio. Apotheker followed that news with plans to acquire software company Autonomy and possibly ditch the PC business.
The moves were considered necessary by Apotheker, who argued that HP wasn't on the proper strategic path for growth. Shareholders were quickly critical of his plans, and shares dropped more than 25 percent by trading's end on August 19.
Although HP fired Apotheker just under a year into his tenure as CEO, the class-action lawsuit settled on Monday asked the company to pay for his strategic change of heart. The plaintiffs argued that HP had been selling them on a particular plan revolving around WebOS and PCs for quite awhile, and the sudden change in course was of "false and misleading nature." The plaintiffs charged HP with Securities and Exchange Commission (SEC) law violations.
For its part, HP hasn't said too much about the case, but a spokeswoman did tell Reuters on Monday that the resolution was "mutually acceptable" to both sides.
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