HP’s tragic crash: The persecution of Mike Lynch’s widow is just the latest in a series of controversies

The death of Mike Lynch in the Bayes superyacht disaster was the tragic event of the summer.

The ship sank off the coast of Sicily on August 19, killing Lynch, his daughter and five other people.

But for his widow, Angela Bacares, the nightmare has only just begun.

Technology giant Hewlett-Packard (HP) is demanding £3bn from her, which she says is owed to her late husband.

Lynch, 59, has been embroiled in litigation with HP for more than a decade. The problems arose after the sale of his company Autonomy to HP – then led by Leo Apotheker – in 2011 for £8.6 billion.

The tycoon was extradited to the US in 2023, where he faces charges of defrauding the US giant in connection with the deal. In June, a California court acquitted Lynch.

However, in a separate High Court case in 2022, HP won a multi-billion pound lawsuit accusing Lynch of fraud in the purchase. And the US company has decided to pursue the grieving family for the £3bn despite the criticism.

The decision, which Lynch family friend Patrick Jacob called “completely inhumane,” is another questionable ruling from a company that critics say is guilty of a litany of failures spanning decades.

Even before the disastrous Autonomy deal and the failed attempt to jail Lynch, one of Britain’s most respected tech entrepreneurs, HP’s record was marked by boardroom dysfunction, poor business and alarming CEO turnover.

Strictly speaking, it is Hewlett Packard Enterprise (HPE), founded in 2015 after the split of the Hewlett-Packard empire, that is pursuing Bacares.

Just two weeks after the tragedy, it said: “HPE’s intention is to pursue the process to completion.”

“Fundamentally we believe the things that happened were not in the interests of shareholders and we have to see this through.”

HPE may well feel the need to appease its investors. It has a legendary past, but its recent history shows that this one-time Silicon Valley pioneer is a fallen giant, completely overshadowed by Google, Meta and Apple.

Today, Hewlett-Packard’s two successors, HP Inc and HPE, are worth a combined $60 billion. In contrast, Google’s parent company Alphabet is worth $2 trillion, Meta’s market value is $1.4 trillion, and Apple’s is $3.4 trillion.

One tech analyst told the Mail: “HP is a tragic story.” It once dominated the tech scene but has fallen behind. For others, there is a lesson: technology dominance doesn’t last forever.

Boss: Under Meg Whitman (pictured), who next took over as CEO, HP cut Autonomy’s value by 80 percent in November 2012

“The reality is that the company probably cannot afford to give up on Lynch and his family.”

The trial will place a heavy financial burden on the family, close sources say, and Bacares, 57, is said to be nervous about possibly fighting HP without her husband.

The move shows that even in death, Lynch and his family cannot get rid of the US company that persecuted him.

When Lynch sold Autonomy, it was the most expensive acquisition of a British technology company ever. Some saw this as confirmation that British technology is competitive on the world stage.

Others were more skeptical. At the time, HP was experiencing financial difficulties and had suffered a number of failures in large acquisitions in the past. Many felt that Lynch had sold his company to the wrong bidder and that he was making a deal with a “wounded animal.”

Less than a year later, the deal collapsed when HP announced an $8.8 billion writedown, saying it had discovered “accounting misstatements.”

No doubt the debacle would have horrified founders Bill Hewlett and Dave Packard, who founded the company in 1939 in a garage in Palo Alto, California. HP dominated the US technology scene for decades.

In the 1990s, HP was a global company best known for personal computers and printers. The company employed more than 80,000 people, generated net sales of $48 billion, and had a market value of over $17 billion.

The company was also well known in the UK and had an office in London and a huge campus in Bracknell, Berkshire.

When Lynch was introduced to HP executives in 2011, he was a shadow of his former self.

The problems began in 2002, when the company embarked on a $25 billion merger with Compaq – then the largest technology deal ever – to become the world’s largest PC seller.

The merger was led by CEO Carly Fiorina, who unsuccessfully ran as a Republican presidential candidate in 2016. The Compaq deal was a disaster from the start. Analysts condemned it as “the worst merger ever” and it became a textbook in business schools on how not to do such a thing.

Fiorina stepped down in 2005 with a golden farewell reportedly worth $21 million.

HP then had four CEOs within six years and its reputation and shares suffered a severe blow. From 2000 to 2011, shares fell 85 percent and more scandals followed.

Shortly after Fiorina, 70, left, evidence emerged that the company had hired private investigators to spy on board members and journalists.

In 2010, Chief Executive Mark Hurd resigned after a woman who worked in marketing for HP sent a letter accusing him of sexual harassment.

An investigation found that Hurd — who died in 2019 at age 62 — had falsified expense reports and other financial documents to conceal the relationship.

Next came the 71-year-old German CEO Apotheker, who led HP from November 2010 until his dismissal in September 2011.

During his tenure, he completed the Autonomy deal and attempted to turn HP into a thriving enterprise software company.

He relied on Autonomy’s 2010 annual report to assess its financial position and was enticed by what he saw, as the company had reported $870 million in revenue.

In April this year he told a London court: “Those were strong numbers.” We had just emerged from the end of the great financial crisis. Many software companies have had problems.

“This was an example of a software company that continued to grow at double-digit rates.” But the deal quickly became a flop.

Under Meg Whitman, who next took over as CEO, HP wrote down Autonomy’s value by 80 percent in November 2012, blaming $5 billion for the decline on “serious accounting irregularities” and “completely misrepresentations” by Autonomy attributed.

Whitman and Lynch had a difficult relationship from the start. She believed he was unsuitable for a management position at a large company, and at one point Lynch reportedly told her that Autonomy would miss sales targets just the day before its results were released.

Whitman, 68, later said this was “completely unacceptable behavior for any leader.”

Lynch is said to have repeatedly complained to Whitman that Autonomy was not properly integrated into HP. This included, according to court documents, Autonomy employees being denied access to HP offices.

Under Whitman, HP also underwent its most dramatic transformation to date. The former eBay boss led rounds of cost-cutting and then decided to dissolve the company in 2015.

Whitman chose HPE, which acquired HP’s business software division, including Autonomy. The other half, HP Inc., houses the printer and PC business.

The tragedy for the Lynch family is that even in death they cannot escape HP’s clutches.

In fact, Lynch had celebrated the evacuation of the Bayesian in Sicily when it sank.

How his family must regret the day they were introduced to Silicon Valley’s original trailblazer.

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