HP did confirm that the shareholders agreed to drop all claims against HP's executives and board members, including CEO Meg Whitman.
HP also said the deal required the shareholders to assist with any potential legal actions it pursues against former officials from Autonomy.
Shareholders had accused HP of not doing enough to investigate potential weaknesses in Autonomy's business, the Wall Street Journal reported. For its part, HP said Autonomy misrepresented itself and tricked HP into paying $11 billion for it. (That's likely why HP may be pursuing legal claims against former Autonomy officials.)
While we don't know how much HP paid to settle the shareholder litigation, court filings dug up by GigaOm's Barb Darrow revealed an interesting bit of information.
HP has turned around and hired the shareholders' lawyers directly and will pay them a percentage of money it is awarded in any legal actions it files against ex-Autonomy officials.
HP agreed to pay the shareholders' lawyers a monthly retainer that adds up to $562,500 for 32 months worth of work, plus up to $30 million of whatever money HP "recovers" from former Autonomy execs. The shareholders' lawyers will get 10% of up to $100 million and 25% of anything over $100 million, capped at $30 million.
HP also agreed to pay $25,000 to one shareholder involved in the suits, the Financial Times reports.
The agreement offers some interesting insight into the business of shareholder lawsuits, which are extremely common with any M&A deal valued at over $100 million. The majority of them settled, according to the Harvard Law School.
To recap the lawsuit against Autonomy: HP paid $11 billion for Autonomy. Less than a year later, HP wrote off $8.8 billion and alleged that Autonomy had improperly inflated its revenues and margins, to the tune of $5 billion.
Former Autonomy CEO Michael Lynch has consistently and vehemently denied all wrongdoing and has said that HP's own mismanagement of Autonomy after the acquisition caused the problems.
He calls this latest settlement a "smear campaign" and says he hopes "HP will finally give a full explanation."
Here's the bit in the court filing that talks about HP hiring the shareholders' lawyers:
"In recognition of the substantial benefits conferred upon HP, HP, by and through its Independent Committee, has entered into an engagement letter with the Settling Plaintiffs' Counsel that provides for a fixed fee and fee contingent upon the amount recovered by HP. More particularly, in addition to a fixed monthly retainer in the amount of $562,500 for 32 months, Settling Plaintiffs' Counsel will be eligible to receive a contingent fee equal to 10% of the amount recovered by HP up to $100 million, and 25% of any amount in excess of $100 million, up to a maximum contingent amount of $30 million.
HP had no further comment.