In re Garrett Motion Inc. Securities Litigation, No. 20-cv-8296 (JPC) (S.D.N.Y.)
E&C serves as Lead Counsel in this federal securities class action in the United States District Court for the Southern District of New York against current and former directors and officers of Garrett Motion Inc. (“Garrett”) on behalf of investors that acquired or otherwise received Garrett securities during the period October 1, 2018 through September 18, 2020, inclusive. The action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
Garrett, based in Rolle, Switzerland, is a former division of Honeywell International Inc. (“Honeywell”). The company designs, manufactures and sells turbochargers, electric-boosting and connected vehicle technologies. E&C’s Consolidated Amended Complaint, filed on February 25, 2021, alleges that Honeywell’s October 1, 2018 spin-off of Garrett into an independent company was effectuated through a “sham” negotiation, orchestrated in part by Honeywell’s assistant general counsel who also served as Garrett’s president and sole director. The unfair negotiation process forced Garrett to assume an unacceptable level of debt and onerous indemnity obligations to Honeywell that undermined Garrett’s ability to survive as an independent company. Garrett’s capital structure restricted the company’s ability to: (i) invest in new technology; (ii) maintain customer and supplier relationships; (iii) engage in strategic transactions; and (iv) raise additional capital. As a result of these issues, Garrett was forced to file for Chapter 11 bankruptcy protection on September 20, 2020.
In addition to prosecuting the federal securities claims on behalf of the class, E&C represents an institutional investor with a significant equity interest in Garrett in the company’s bankruptcy proceedings. During the bankruptcy, E&C has made numerous targeted objections on behalf of equity holders and engaged in extensive negotiations with all interested parties – including the debtors, creditors committee and the purchasers of the company in bankruptcy – to improve the recovery for equity. Significantly, equity holders will now receive, at their election, $6.25 for each share of common stock or a rollover of that stock into the reorganized Garrett.
If you wish to view the Consolidated Amended Complaint, please click here.