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A California federal judge has granted final approval to a $39 million securities fraud settlement between HP Inc. and a class of investors, bringing an end to years of high-stakes litigation that was revived by the Ninth Circuit in 2023.

During a brief Zoom hearing Friday, U.S. District Judge Jeffrey S. White said he would sign the final order without delay, praising both sides for reaching what he described as a “very fair and just and appropriate” resolution. The judge also approved class counsel’s request for $11.7 million in attorneys’ fees — representing 30% of the settlement fund — along with $130,243 in litigation costs and interest on both fees and expenses.

No Objections, Minimal Opt-Outs

Investors’ counsel reported that no class members objected to the settlement. Only two investors opted out, together holding just 2,100 shares of HP stock. That figure represents a tiny fraction of the approximately 81 million shares tied to claims submitted by roughly 115,000 investors.

The absence of objections and minimal opt-outs appeared to reinforce the court’s confidence that the agreement was reasonable and broadly supported.

Background of the Case

The litigation, filed in November 2020, accused HP’s former CEO Dion J. Weisler and former Chief Financial Officer Catherine A. Lesjak of misleading investors about the company’s financial health following its spinoff from Hewlett-Packard Co.

According to the complaint, the executives misrepresented revenue, profit margins and supply channel inventory practices between November 2015 and June 2016, allegedly violating the Securities Exchange Act of 1934 and related regulations. Investors claimed that when the true state of the company’s business came to light in late 2015 and early 2016, HP’s stock price suffered sharp declines, resulting in substantial losses.

Procedural Twists and Appellate Revival

Judge White initially dismissed the case in March 2022, ruling that it was barred by the two-year statute of limitations applicable to securities fraud claims. He found that the alleged misstatements and financial disclosures at issue occurred by 2016 — four years before the lawsuit was filed.

However, the Ninth Circuit revived the case in 2023. The appellate panel concluded that the key facts supporting the plaintiffs’ scienter allegations were not “discovered” until September 2020, when the U.S. Securities and Exchange Commission initiated cease-and-desist proceedings against HP. The SEC’s findings, the panel said, cast prior public statements in a new light, suggesting they were intentional misrepresentations rather than mere business misjudgments.

On remand, HP again sought dismissal, achieving only partial success. The company then pursued an interlocutory appeal, which the Ninth Circuit agreed to hear in August 2024. Although the appeal was fully briefed, the parties reached a settlement before oral arguments were scheduled.

Settlement Terms and Risk Assessment

Under the agreement, investors who purchased or acquired HP common stock between Nov. 5, 2015, and June 21, 2016, are eligible for compensation. Claimants entitled to at least $10 per share will receive a pro rata share of the net settlement fund.

Court filings indicate that the lead plaintiff estimated maximum recoverable damages of approximately $155.5 million if the class had prevailed at trial on all claims and damages. Nevertheless, the plaintiff characterized the $39 million recovery as fair and reasonable given the uncertainties of appeal and the risks inherent in complex securities litigation.

With final approval now granted, the settlement resolves a case that navigated dismissal, appellate revival and renewed motion practice before ultimately concluding through negotiated resolution.

The case is York County et al. v. HP Inc. et al., in the U.S. District Court for the Northern District of California.