Type of Claim: Opt-out of US class action
Claim Period: 27 February 2013 – 23 January 2018
Defendants: General Electric Company, et al
Jurisdiction: United States District Court, Southern District of New York
Governing Law: United States federal laws
Opt-out deadline: No deadline has been set as class yet to be certified. However, the five-year “statute of repose” is running.
General Electric (GE) is a multinational conglomerate that offers products and services worldwide, ranging from aircraft engines, power generation, and oil and gas production equipment to medical imaging, financing, and industrial products. GE trades on the New York Stock Exchange (NYSE: GE), is incorporated in New York and headquartered in Boston.
On 16 January 2018 GE announced that following its review it would be taking an after-tax GAAP charge of $6.2bn for the fourth quarter and that it expected to make statutory reserve contributions of c$15bn over seven years in relation to its Long Term Care Insurance portfolio.
On 24 January 2018 GE disclosed that the US Securities and Exchange Commission (SEC) had commenced an investigation into the company’s US$15bn insurance reserve increase and its US$6.2bn charge for the fourth quarter of 2017, as well as its revenue recognition and controls for Long Term Service Agreements. GE’s stock price plummeted following the revelations, causing large losses to investors. Further, several of GE’s senior executives, including then-CEO Jeffrey Immelt and then-CFO Jeffrey Bornstein, left the company amid the fallout.
A class action (17-CV-08457-JMF) was filed in federal court in the Southern District Court of New York.
On 29 August 2019 motions to dismiss were granted against the majority of the claims with only the claims regarding factoring surviving. The judge granted the plaintiffs the right to file an amended complaint and agreed the following timetable:
- Plaintiffs to file a fifth amended complaint by 25 October 2019
- Defendants to respond by 18 December 2019
- Plaintiffs to file opposition by 31 January 2020
- Defendants to file reply by 28 February 2020
Stewarts believes that clients with significant losses (>$25m) may be able to maximise their recovery by ultimately opting out of the US class action and filing a direct-action complaint. Limitation will be a factor in the analysis of whether a claimant should opt-out as the 5 year statute of repose is running.
Stewarts is prepared to perform a confidential damages analysis free of charge and without obligation for clients. In order to undertake that analysis, Stewarts requires clients to provide their transactional data.
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