SAN JOSE, Calif. (CN) - A federal judge dismissed claims that Hewlett-Packard lied to shareholders and ignored reports of "widespread illegality" within the company.
A.J. Copeland, a Hewlett-Packard shareholder, had claimed that Hewlett-Packard faced financial losses in the billions because its board of directors violated the Securities Exchange Act, breached their fiduciary duty to shareholders and depleted corporate assets.
Copeland sought to overturn the election of Hewlett-Packard's board of directors because proxy statements used to solicit votes from HP shareholders allegedly failed to disclose "wrongdoing" perpetuated by the board.
Hewlett-Packard's board of directors failed to disclose that it ignored reports of the company's "illegal payment of bribes," according to the complaint, which also said they tried to cover up illegal conduct when investigated by the Securities Exchange Commission and Justice Department.
The complaint also accused Hewlett-Packard of concealing its waste of significant company assets, which included $12 million to silence a former director after a scandal, reckless bidding to the tune of $2.3 billion, exposure of the company to massive fines, and excessive compensation for the board of directors.
U.S. District Judge Edward Davila concluded Monday, however, that Copeland could not advance his claims because he failed to show that the board acted in bad faith when it investigated and rejected Copeland's allegations.
Copeland had additionally been too late to request a revote for the 2012 board since the directors had already served most of their terms, according to the ruling.
Davila barred Copeland from amending his complaint for a third time to include allegations related HP's actions with respect to its acquisition of Autonomy Corp.
Since HP announced plans of an $8.8 billion write-down related to this acquisition, Copeland said it presented new evidence of waste.
Davila found, however, that it would introduce new and separate causes of action related to a different board of directors.
Hewlett-Packard meanwhile faces a federal class action from shareholders in San Francisco alleging that the company ignored evidence from whistle-blowers and hid concerns about the $11.1 billion acquisition of the software company Autonomy.
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.
Additional Reads
-
Alaska, Hawaiian Airlines April 17, 2024 -
-
Contributor-Test-Post-2024-04-12 April 12, 2024 -
