Beyond BSkyB, is HP dealing with other EDS litigation?

HP's corporate leaders gave no answer yesterday when questioned on whether they are facing possible damages from litigation relating to services supplier...

HP's corporate leaders gave no answer yesterday when questioned on whether they are facing possible damages from litigation relating to services supplier EDS before HP took it over in 2008.

Under the rules of the US Securities and Exchange Commission, it is likely that HP would have to declare the existence of any major litigation that pre-dated HP’s acquisition of EDS. It is unclear, though, whether HP is facing any other litigation from before the acquisition.

The question to HP's bosses about possible EDS-related litigation came during a conference call on the company's strong first quarter results.

Mark Hurd, chairman of HP, said the integration with EDS "remains ahead of plan" and has "significantly enhanced our competitive position".

But none of the top executive team at HP answered an analyst's question about whether, apart from the BSkyB case, any other litigation pre-dates HP's acquisition of EDS.

The BSkyB litigation dates back to 2004, when it issued a £700m writ against EDS. The damages have yet to be assessed, but are likely to be a minimum of £200m. Last week, HP made an interim payment to BSkyB of £200m.

It is not known whether HP's bosses dodged the question or forgot to answer it while replying to the analyst's other questions.

Analyst Louis Miscioscia, from Collins Stewart, raised the legal dispute between EDS and BSkyB during the conference call. He asked if there was any other litigation "lingering from the old EDS days" before HP acquired it.

HP's chief financial officer, Cathie Lesjak, replied that the judge in the BSkyB case has not yet made a decision on what the damages should be.

"In terms of BSkyB, we put out a press release when, I guess, the judge gave his first conclusions on the liability in that case. We believe we are appropriately accrued based on the ruling, but we still need to get to the settlement of the case, and no damages have been assessed yet," she said.

"You may have read of an interim payment made to the tune of about £200m in Q2. And obviously if there is anything materially different than what we accrued, we would call it out to you all," Lesjak added.

At that point, Jim Burns, vice-president of HP Investor Relations, called for the next question, leaving Miscioscia's question on any EDS-related legislation unanswered.

Computer Weekly has asked HP whether the analyst's question on any other EDS-related litigation was dodged, and whether it is dealing with any outstanding legal disputes from EDS. We expect HP's response shortly.

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