Andrews & Springer LLC filed a stockholder derivative complaint (the “Complaint”) on behalf of nominal defendant, Baker Hughes, A GE Company (“Baker Hughes” or the “Company”) against the Company’s board of directors (the “Board”). The Complaint challenges the Board’s conflicted decisions to, among other things, (1) allow General Electric Company (“GE”), the Company’s controlling stockholder, to terminate its lockup period to sell Baker Hughes stock, (2) repurchase $1.5 billion in Baker Hughes stock from GE and (3) permit GE to sell $2.5 billion in Baker Hughes stock through a secondary offering. In connection with these transactions, the Board also caused Baker Hughes to enter into a series of long-term agreements with GE on technology, fulfillment, and other key areas (the “Master Agreement Framework”) that would substantially benefit GE at Baker Hughes’s expense (collectively, the “Transactions”).
As a result of the Transactions, GE was able to immediately terminate the lockup restrictions on its holdings, sell a large amount of Baker Hughes stock at undiscounted prices, obtain more than $4 billion in immediate and much-needed liquidity while still maintaining its control over Baker Hughes.
Please click here for a copy of the Complaint which was filed on March 13, 2019.