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Garrett Motion Files Complaint Against Honeywell in Asbestos Indemnity Suit
104-Page Filing Details How Honeywell Foisted Its Legacy Asbestos Liabilities Upon Garrett Through An Unenforceable 30-Year Indemnification Agreement ROLLE,
About this update from Garrett Motion Inc.
[{"type":"text","content":"\n104-Page Filing Details How Honeywell Foisted Its Legacy Asbestos Liabilities Upon Garrett Through An Unenforceable 30-Year Indemnification Agreement \n\n ROLLE, Switzerland--(BUSINESS WIRE)--\nGarrett Motion Inc. (NYSE: GTX) today filed the complaint in its lawsuit, initiated on Dec. 2, 2019, against Honeywell International Inc. (NYSE: HON), related entities and certain affiliated individuals in the Supreme Court of the State of New York.\n\n\nThe complaint details how Honeywell and its executives, and not Garrett’s current management, devised Garrett’s spinoff to offload Honeywell’s more than $1 billion legacy Bendix asbestos liability, while saddling Garrett with unconscionable and illegal covenants that unnecessarily limit its ability to control its long term future. Garrett’s complaint includes the following assertions:\n\n\n\nTop Honeywell executives devised Garrett’s spinoff to offload the financial burdens of its asbestos liabilities. In October 2018, Honeywell spun off what remained of its Transportation Systems business, primarily a turbocharger business, into what is now Garrett Motion. Garrett’s lawsuit arises from Honeywell’s unilateral imposition of a 30-year Indemnification Agreement as part of that spin. This agreement requires Garrett to compensate Honeywell for payments made to resolve Honeywell’s asbestos liabilities arising from Honeywell’s legacy Bendix automotive brake business. That brake business is completely unrelated to Garrett’s turbocharger business.\n\n\nHoneywell did not negotiate the one-sided Indemnification Agreement with Garrett. Because no rational company would ever voluntarily agree to the egregious terms of the Indemnification Agreement, Honeywell installed one of its own in-house lawyers prior to the spinoff as Garrett’s president and sole director for the purpose of forcing these unconscionable terms on Garrett. In addition, Garrett did not have independent legal representation during the spinoff process: Honeywell retained the same lawyers to represent both Honeywell and Garrett in connection with the spinoff. The lawyers blindly acceded to Honeywell’s wishes, regardless of the best interest of their other client, Garrett.\n\n\nThe Indemnification Agreement violates New York law. The Indemnification Agreement purports to illegally require Garrett to indemnify Honeywell for punitive dam...