Bayesian superyacht tycoon victim who drowned ordered to pay £700m in fraud case

The estate of British tech tycoon Mike Lynch - who drowned aboard his superyacht in a freak storm last year - is set to bankrupted after being ordered to pay hundreds of millions in a fraud case.

A High Court judge ruled that Mr Lynch - and another former executive - should compensate US giant Hewlett Packard Enterprise £700million over the 2011 sale of the software company he co-founded, Autonomy. But given his death a year ago off the coast of Sicily, it is likely to fall on his estate to pay instead. Reports say Mr Lynch’s estate is estimated to be worth around £500million so there would be nothing left to pass to Mr Lynch’s wife, Angela Bacares, and his surviving daughter, unless they appeal.

The outcome of the civil case comes after Mr Lynch, 59, was aboard his yacht, the Bayesian, celebrating his acquittal in the US on separate criminal charges that also related to the sale of his company to Hewlett Packard.

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The £700million compensation bill is, however, much less than HP was demanding.

HP sued Mr Lynch and Autonomy’s former chief financial officer, Sushovan Hussain, in 2015. The US tech giant previously said that it planned to “follow the proceedings through to their conclusion”, meaning HP’s case would proceed against Mr Lynch’s estate.
HP had accused Lynch and Hussain of masterminding an elaborate fraud to inflate the value of Autonomy, which HP bought for $11.1billion (£8.2billion) in 2011. The deal spectacularly unravelled, with HP writing down Autonomy’s value by $8.8billion (£6.5billion) within a year before it brought a $5 billion lawsuit against Lynch and Hussain in London.

A judge at the High Court ruled in HP’s favour in 2022, though there have been long delays since in determining what damages should be awarded to HP.

Mr Lynch, once hailed as Britain’s answer to Bill Gates, had always maintained his innocence and blamed HP for failing to integrate Autonomy into the company. He was acquitted of criminal charges over the deal in the US and had intended to appeal the High Court’s 2022 ruling, a process which has been on hold pending a decision on damages.

Mr Lynch, his daughter Hannah, 18, an onboard cook and four guests - Morgan Stanley International Chairman Jonathan Bloomer, his wife Judith, lawyer Chris Morvillo and his wife Neda - died after his superyacht sank. Fifteen people, including Ms Bacares, survived. The couple’s other daughter, Esme, 22, was not on the boat. Despite the ruling, Ms Bacares is said to have her own assets that were ring-fenced from her late husband’s estate. She is, however, the sole shareholder of Revtom, the corporate entity that owned the Bayesian.

The wreckage of the Bayesian superyachthas been raised from the sea bed in a bid to find any more clues about the disaster.

High Court judge Mr Justice Hildyard ruled that HPE suffered losses amounting to £697,876,753 through the purchasing of Autonomy, some of which is set to be paid by Mr Lynch’s estate. He also ruled that Mr Lynch’s estate is liable to pay part of around £35million in damages.

Some of the money is due to be paid by Mr Hussain, Autonomy’s former chief financial officer, who was also sued.

A further hearing to deal with matters including interest, currency conversion and whether Mr Lynch’s estate can appeal against the decision is set to be held in November.

Handing down his ruling, Mr Justice Hildyard expressed his “great sympathy” for Mr Lynch’s family, calling his death a “tragedy”.
He said: “It is a source of anxiety to me that I have to deliver a judgment that will inevitably cause further stress on those involved.” In the 197-page ruling, he said he considered that HPE’s claim “was always substantially exaggerated” and that the $5billion claimed “was not based on detailed analysis”.

A spokesperson for HPE said: “We are pleased that this decision brings us a step closer to the resolution of this dispute. We look forward to the further hearing at which the final amount of HPE’s damages will be determined.”

Jeremy Sandelson, who was appointed by the court as administrator of Mr Lynch’s estate, said he would be “examining the judgment carefully”, including whether to appeal both the 2022 ruling and the latest judgment.