Garrett Motion Inc. Class Action Lawsuit
- Company Name
- Garrett Motion Inc.
- Stock Symbol
- NYSE:GTX; OTC:GTXMQ
- Class Period
- October 1, 2018 to September 18, 2020
- Southern District of New York
The Garrett Motion Inc. class action lawsuit charges certain of Garrett Motion's executives with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers or acquirers of Garrett Motion securities between October 1, 2018 and September 18, 2020, inclusive (the “Class Period”). The Garrett Motion class action lawsuit was commenced on September 25, 2020 in the Southern District of New York and is captioned Husson v. Garrett Motion Inc., No. 20-cv-07992.
Garrett Motion designs, manufactures, and sells turbocharger, electric-boosting, and connected vehicle technologies for original equipment manufacturers and the aftermarket. In October 2018, Garrett Motion formed as a spin-off of the Transportation Systems business of Honeywell International Inc.
The Garrett Motion class action lawsuit alleges that during the Class Period defendants made false and/or misleading statements and/or failed to disclose that: (1) due to its agreement to indemnify and reimburse Honeywell for certain asbestos-related liability, Garrett Motion was saddled with an unsustainable level of debt; (2) as a result, Garrett Motion had a highly leveraged capital structure that posed significant challenges to its overall strategic and financial flexibility; (3) Garrett Motion’s ability to gain or hold market share was impaired; (4) Garrett Motion was reasonably likely to seek bankruptcy protection; and (5) as a result of the foregoing, defendants’ positive statements about Garrett Motion’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
On August 26, 2020, Garrett Motion announced that it would explore alternatives to address certain balance sheet concerns, stating that its “leveraged capital structure poses significant challenges to its overall strategic and financial flexibility and may impair its ability to gain or hold market share in the highly competitive automotive supply market, thereby putting Garrett [Motion] at a meaningful disadvantage relative to its peers.” On this news, the price of Garrett Motion shares fell by more than 44%.
On Sunday, September 20, 2020, Garrett Motion announced that it had filed for Chapter 11 bankruptcy.
Finally, on September 21, 2020, the New York Stock Exchange (“NYSE”) announced that it would commence proceedings to delist Garrett Motion stock from the NYSE after Garrett Motion’s disclosure that it had filed for bankruptcy. On this news, the price of Garrett Motion shares fell by more than 12%, further damaging investors.
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