BENSALEM, Pa.–(BUSINESS WIRE)–Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Garrett Motion Inc. (“Garrett” or the “Company”) (NYSE: GTX, OTC: GTXMQ) securities between October 1, 2018 and September 18, 2020, inclusive (the “Class Period”). Garrett investors have until November 24, 2020 to file a lead plaintiff motion.
Investors suffering losses on their Garrett investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to [email protected]
Garrett designs, manufactures and sells turbocharger, electric-boosting and connected vehicle technologies for original equipment manufacturers and the aftermarket. In October 2018, the Company formed as a spin-off of the Transportation Systems business of Honeywell International Inc. (“Honeywell”).
On August 26, 2020, before the market opened, the Company disclosed 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 at a meaningful disadvantage relative to its peers.” The Company further stated that its “high leverage is exacerbated by significant claims asserted by Honeywell against certain Garrett subsidiaries under the disputed subordinated asbestos indemnity and the tax matters agreement.”
On this news, the Company’s share price fell $3.04, or 44%, to close at $3.84 per share on August 26, 2020, thereby damaging investors.
On Sunday, September 20, 2020, Garrett announced that it had filed for Chapter 11 bankruptcy.
On Monday, September 21, 2020, the New York Stock Exchange (“NYSE”) announced that it would commence proceedings to delist Garrett’s stock from the NYSE after the Company’s disclosure that it had filed for bankruptcy.
On this news, the Company’s stock began trading over-the-counter and closed at $1.76 per share on September 22, 2020, a 12% decline from the closing price on September 18, 2020.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that, due to its agreement to indemnify and reimburse Honeywell for certain asbestos-related liability, Garrett was saddled with an unsustainable level of debt; (2) that, as a result, Garrett had a highly leveraged capital structure that posed significant challenges to its overall strategic and financial flexibility; (3) that, as a result of the foregoing, Garrett’s ability to gain or hold market share was impaired; (4) that, as a result of the foregoing, the Company was reasonably likely to seek bankruptcy protection; and (5) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
If you purchased Garrett securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to [email protected], or visit our website at www.howardsmithlaw.com.
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