Friday, May 2, 2014
Labaton Sucharow Secures $57 Million Settlement in HP Securities Fraud Case
NEW YORK (May 2, 2014) – Labaton Sucharow LLP announced today after adding more than a dozen confidential witnesses and working with a truncated class period, the Firm resurrected the securities class action against Hewlett-Packard (HP) and reached a $57 million settlement (pending final court approval) on behalf of lead plaintiffs and the class.
In In re Hewlett-Packard Company Securities Litigation, a team of Labaton Sucharow attorneys led by partner Jonathan Gardner represented Arkansas Teacher Retirement System, Union Asset Management Holding AG, Labourers' Pension Fund of Central and Eastern Canada, and the LIUNA National (Industrial) Pension Fund and LIUNA Staff & Affiliates Pension Fund.
Lead plaintiffs alleged that after HP purchased Palm Inc., HP announced a new business strategy focusing on its newly acquired webOS operating system and its signature corporate initiative to build that business into a connected "ecosystem" across smartphones, tablet computers, PCs and printers. After months of fanfare, HP announced that it would shut down its webOS efforts, ultimately abandoning its $1.2 billion investment of Palm Inc. WebOS-enabled PCs and printers were never offered for sale. HP stock fell nearly 25 percent on this news.
Lead plaintiffs initially alleged that HP's former CEO and current executive vice president made misleading statements about its commitment and ability to put the webOS products out in the market.
Dismissed in September 2012, investors were given a second chance to file an amended complaint in late October 2012. This time, the theory alleged that HP recklessly misled the market regarding its plans to put webOS on its PCs and printers in a specific time frame.
After HP's motion for reconsideration was denied, the parties went into discovery and ultimately mediation, resulting in the settlement.
"We are happy to have had an opportunity to amend the complaint and even happier to have reached this settlement with HP. We are very satisfied with the recovery for investors in light of the court's orders on the motions to dismiss," said Jonathan Gardner.
UPDATE: The $57 million settlement was granted final approval by the court on September 15, 2014.