The recovery represents 8% to 36% of the class’s estimated recoverable damages, which ranged from $1 billion to $4.5 billion according to a damages expert. The motion highlighted the inherent risks of taking any case to trial, particularly one of such complexity.
Allegations of Concealed Cash Flow Problems
The lawsuit, originally filed in November 2017, alleged GE misrepresented financial health by omitting details about its use of a factoring practice. Investors claimed the practice, which involved recording earnings from long-term service agreements far in advance of actual cash collection, was used to mask cash flow shortfalls. When these practices were revealed, GE’s stock price plummeted, harming investors.
The complaint—amended six times—alleged that GE concealed the extent of its liquidity issues by misleadingly attributing factoring to credit risk management rather than cash flow needs.
Litigation History and Representation
U.S. District Judge Jesse M. Furman dismissed parts of the investors’ fifth amended complaint in January 2021, including claims regarding misrepresented liabilities in GE’s long-term-care insurance portfolio. However, the plaintiffs secured class certification in April 2022.
