HP sued by MicroTech over software transactions

Maryland investors may have heard about a legal dispute that has developed between Hewlett-Packard and Autonomy. HP acquired the British software company in 2011 for approximately $11 billion, but the value of the company has subsequently been written down amid allegations of impropriety. HP filed a $5 billion lawsuit against Autonomy in the British High Court in April 2015. The lawsuit claims that the Autonomy’s founders misrepresented transactions in order to make the company appear more profitable.

The legal dispute escalated on May 18 when MicroTech filed a breach of contract lawsuit against HP in California, seeking damages of $16.5 million. The company claims that it paid Autonomy $11 million in 2010 and $7 million in 2011 but never received the software keys necessary to complete the transactions with their end users. An attorney representing the Virginia-based company said that MicroTech wants HP Autonomy to either provide the software as agreed or refund the money.

While HP declined to comment directly on the latest lawsuit, MicroTech is mentioned prominently in the London fraud litigation brought by the company. HP claims in that lawsuit that Autonomy paid MicroTech via profits earned from a number of questionable software deals. HP lawyers say that Autonomy paid MicroTech $8.2 million in 2011 for software that was never delivered. According to HP, the funds from this transaction were then used to pay Autonomy for the the $7 million transaction mentioned in the May 18 lawsuit brought by MicroTech. HP says that the two companies engaged in nine questionable transactions worth $33 million.

Breach of contract lawsuits are often highly complex, and any court action involves a degree of uncertainty. An attorney with experience in this area could help business owners to avoid such legal situations by scrutinizing contracts and identifying potential areas of conflict before matters become contentious.

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