Posted Aug 26, 2014 04:10 pm CDT
A federal judge indicated on Monday that he wouldn’t approve a deal in which plaintiffs lawyers who sued Hewlett-Packard would represent the company in future litigation, earning as much as $48 million for their work.
U.S. District Judge Charles Breyer of San Francisco rejected the attorney fee plan at a hearing on Monday, report the Recorder, Bloomberg News and Reuters. “I’m not going to approve the fee arrangement, period,” Breyer said. “That’s out.” He did say, however, that nothing prevents HP from hiring the law firms outside of the settlement, according to the Recorder account.
The deal reached in July requires HP to make governance reforms to resolve a shareholder suit over its 2011 acquisition of software firm Autonomy. The year following the acquisition HP took an $8.8 billion writedown, attributing $5 billion to alleged accounting fraud by Autonomy executives.
The proposed settlement (PDF) would pay two plaintiffs’ law firms a fixed fee of $18 million and as much as much as $30 million in contingency fees to represent HP in suits against Autonomy executives, according to prior coverage by the Recorder. The firms are Cotchett, Pitre & McCarthy and Robbins Geller Rudman & Dowd.
Autonomy’s former chief financial officer, Sushovan Hussain, is among those who object to the deal. Breyer will consider whether he may intervene in a hearing next month. But Hussain’s lawyer, John Keker of Keker & Van Nest, spoke against the proposed settlement in court on Monday.
“This is a joke,” Keker said. “If it was a carcass, animals would walk around in it, it stinks so much.”