Deloitte turns to Latham and Taylor Wessing for HP Autonomy row

Deloitte has turned to Latham & Watkins and Taylor Wessing to advise it on potential claims arising from the explosive row between Hewlett-Packard (HP) and Autonomy in the months before the latter’s $11.1bn takeover.

The accounting firm has instructed Los Angeles-based Latham partner James Farrell and London-based Taylor Wessing partner Julian Randall over its role auditing Autonomy’s disputed accounts, which HP argues were responsible for a $5bn write-down after the acquisition (14 December 2012).

Deloitte turned to the firms last year when the Financial Reporting Council (FRC) announced a probe into Autonomy’s accounts and are now advising on a fresh threat from HP launched in the US (28 August 2014).

HP has instructed Wachtell Lipton Rosen & Katz partners Marc Wolinsky, George Conway and Farella Braun & Martel partner Neil Goteiner for the current US action.

Deloitte was dragged into the spotlight on Monday when HP pledged to pursue it along with Autonomy founder Mike Lynch and finance director Sushovan Hussain in the US District Court. No formal claim has yet been lodged against the accountancy firm.

The threat came as Judge Charles Breyer rejected an $18m fee deal HP had reached with two firms representing former shareholders pursuing HP but persuaded by the company to join its pursuit of Lynch and Hussain.

Robbins Geller Rudman & Dowd and Cotchett Pitre & McCarthy were to receive $18m (£10.8m) in fees over 32 months to sue Autonomy’s founder and finance director instead of HP, with a $30m success payout.

The payment was rejected by the judge, who said more time was needed to decide whether dismissing claims against HP officers was fair. The company said it would continue to hold Autonomy executives responsible for wrongdoing and would add Deloitte to its target list.

HP’s shareholders hit it with legal action in 2012 after the company announced an $8.8bn write-down on the back of the Autonomy acquisition, $5bn of which it said was due to “serious accounting improprieties, disclosure failures and outright misrepresentations” at Autonomy.

In 2012 HP said: “These efforts appear to have been a willful effort to mislead investors and potential buyers, and severely impacted HP management’s ability to fairly value Autonomy at the time of the deal.”

However HP persudaded shareholders to go after Lynch and Hussain instead.

In the past Deloitte has turned to Freshfields Bruckhaus Deringer partner Andrew Hart, who was instructed to examine Deloitte’s involvement with the collapse of MG Rover Group (7 January 2013).

Taylor Wessing’s Randall, based in the London office, was legacy Barlow Lyde & Gilbert commercial disputes head before moving to the firm in 2010 (26 October 2010). Farrell specialises in cases involving a range of complex accounting issues. He defended Arthur Andersen in the multi-billion dollar claims asserted in the consolidated class actions regarding Enron.

Latham declined to comment on the case.