HP Autonomy debacle, many advisers but little good advice | Reuters
When Hewlett Packard acquired Autonomy last year for $11.1 billion, some 15 different financial, legal and accounting firms were involved in the transaction – and none raised a flag about what HP said on Tuesday was a major accounting fraud. HP had relied on a string of leading accounting and legal advisers prior to their purchase of Autonomy yet it appears, according to HP, that serious financial discrepancies exist leading to HP announcing an $8.8 billion writedown in their accounts.
Legal experts are already lining up those firms involved in the transaction with a view to potential litigation. The case is yet another example of how professional firms can face significant claims due to the advice that they provide to their clients. Professional indemnity insurance provides cover for errors/omissions/negligent advice provided and can be arranged for any firm who gives advice to their clients. Find out more on our professional indemnity section.
It’s not just the advising firms that are potentially facing litigation. Questions may be raised about the Directors at HP who were responsible for agreeing the deal. In such a scenario, Directors could seek to rely on Directors and Officers Insurance to ensure that any legal defence costs and damages are paid on their behalf. Further details about Directors Insurance can be found on our Directors and Officers insurance page.
[Update: see our follow-up to this article here]
Posted by Philip Heath on November 21, 2012 in Directors & Officers Insurance, News, Professional Indemnity Insurance | Leave a comment |