Debtors have been administering and reconciling outstanding proofs of claim and proofs of
interest filed against the Debtors. All of the Chapter 11 Cases other than the main lead Chapter 11 Case of the Company have been closed, the main Chapter 11 Case of the Company will remain open until all proofs of claim and proofs of interest are
fully administered. See Note 2, Plan of Reorganization, for more information.
Obligations Payable to Honeywell
The Plan as confirmed by the Bankruptcy Court includes a global settlement with Honeywell providing for, among other things, the full and final
satisfaction, settlement, release, and discharge of all liabilities under or related to the Honeywell Agreements.
Securities Litigation
On September 25, 2020, a putative securities class action complaint was filed against Garrett Motion Inc. and certain current
and former Garrett officers and directors in the United States District Court for the Southern District of New York. The case bears the caption: Steven Husson, Individually and On Behalf of All Others Similarly Situated, v. Garrett Motion Inc.,
Olivier Rabiller, Alessandro Gili, Peter Bracke, Sean Deason, and Su Ping Lu, Case No. 1:20-cv-07992-JPC (SDNY) (the
Husson Action). The Husson Action asserted claims under Sections 10(b) and 20(a) of the Exchange Act, for securities fraud and control person liability. On September 28, 2020, the plaintiff sought to voluntarily dismiss his claim
against Garrett Motion Inc. in light of the Companys bankruptcy; this request was granted.
On October 5, 2020, another
putative securities class action complaint was filed against certain current and former Garrett officers and directors in the United States District Court for the Southern District of New York. This case bears the caption: The Gabelli Asset Fund,
The Gabelli Dividend & Income Trust, The Gabelli Value 25 Fund Inc., The Gabelli Equity Trust Inc., SM Investors LP and SM Investors II LP, on behalf of themselves and all others similarly situated, v. Su Ping Lu, Olivier
Rabiller, Alessandro Gili, Peter Bracke, Sean Deason, Craig Balis, Thierry Mabru, Russell James, Carlos M. Cardoso, Maura J. Clark, Courtney M. Enghauser, Susan L. Main, Carsten Reinhardt, and Scott A. Tozier, Case No. 1:20-cv-08296-JPC (SDNY) (the Gabelli Action). The Gabelli Action also asserted claims under Sections 10(b) and 20(a) of
the Exchange Act.
On November 5, 2020, another putative securities class action complaint was filed against certain current and
former Garrett officers and directors in the United States District Court for the Southern District of New York. This case bears the caption: Joseph Froehlich, Individually and On Behalf of All Others Similarly Situated, v. Olivier Rabiller,
Allesandro Gili, Peter Bracke, Sean Deason, and Su Ping Lu, Case No. 1:20-cv-09279-JPC (SDNY) (the Froehlich
Action). The Froehlich Action also asserted claims under Sections 10(b) and 20(a) of the Exchange Act.
All three actions are
currently assigned to Judge John P. Cronan. Su Ping Lu filed a waiver of service in the Gabelli Action on November 10, 2020. On November 24, 2020, competing motions were filed seeking the appointment of lead plaintiff and lead counsel and
the consolidation of the Husson, Gabelli, and Froehlich Actions.
On December 8, 2020, counsel for the plaintiffs in the Gabelli
Action the Entwistle & Cappucci law firm filed an unopposed stipulation and proposed order that would (1) appoint the plaintiffs in the Gabelli Action the Gabelli Entities the lead plaintiffs;
(2) would appoint Entwistle & Cappucci as lead counsel for the plaintiff class; and (3) consolidate the Gabelli Action, the Husson Action, and the Froehlich Action (the Consolidated D&O Action). On January 21,
2021, the Court granted the motion to consolidate the actions and granted the Gabelli Entities motions for appointment as lead plaintiff and for selection of lead counsel. On February 25, 2021, plaintiffs filed a Consolidated Amended
Complaint for Violation of the federal securities laws.
The Companys insurer, AIG, has accepted the defense, subject to the
customary reservation of rights.
The bankruptcy court set a bar date of March 1, 2021 for current and former shareholders to file
claims against the Debtors arising from rescission of a purchase or sale of Old Common Stock, for damages arising from the purchase or sale of Common Stock of Garrett Motion Inc., or for reimbursement or contribution allowed under section 502 of the
Bankruptcy Code on account of such claims arising (or deemed to have arisen) prior to the Petition Date for all securities claims arising prior to the Petition Date. We are not yet able to assess the likelihood that any such claims will be allowed.
To the extent allowed, each holder of such claims pursuant to the Plan would be entitled to receive (i) its pro-rata share of the aggregate cash payments received or recoverable from any insurance
policies of the Company on account of any such allowed claims and (ii) solely to the extent that such payments are less than the amount of its allowed claim, payment in full of the remaining amount of its allowed claim, at the option of the
reorganized Debtors, in cash or a number of shares of Common Stock at a value of $6.25 per share.
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