Hewlett-Packard will pay out $57 million to a bevy of shareholders who sued the company claiming that management decisions made when Leo Apotheker was in charge were misleading.
The suit, brought by several shareholders led by the Arkansas Teacher Retirement System, allows HP to deny that it did anything wrong, along with any liability over the claim. The main bone of contention centered on the company misrepresenting its intentions with regard to product development and the business areas on which it would focus.
In 2011 Apotheker said he would spin off the company's PC business and downgrade its mobile business by eliminating the webOS mobile platform it acquired with the purchase of Palm in 2010. Instead, HP would concentrate on building its enterprise and business products categories. In addition, Apotheker headed the initiative to purchase Autonomy Corp. which resulted in HP having to write off $8.8 billion.
However, when Apotheker was fired in 2011 and replaced by current CEO Meg Whitman some of Apotheker's moves were reversed and the suit was filed just days later. Apotheker was also in charge during a particularly rough period where sales forecasts were continuously downgraded.
The shareholders were not happy with the move and decided to take legal action.
"HP has reached a mutually acceptable resolution through a mediated settlement," a company representative said Tuesday.
"Defendants believe that they have meritorious defenses to all claims asserted," according to the filing. Hewlett-Packard, based in Palo Alto, California, agreed to settle the lawsuit because fighting it would be protracted and expensive, according to the filing.
This is only one of several on-going court battles the tech giant is fighting with its shareholders. In a separate case filed in February the company and Apotheker are being sued by investors alleging that poor management and decision making have destroyed shareholder value. Also included are claims that the hiring and firing of Apotheker and bribery probes have also devalued their stock.