Background

GE’s oil and gas division merged with Baker Hughes in 2017, with the multinational conglomerate taking control of Baker Hughes’s board as a result. Facing a liquidity crisis shortly after the merger’s closing, GE looked to sell some of its $15 billion stake in Baker Hughes but – prohibited from doing so until July 2019 under the terms of a multistage lockup – needed the oil company’s consent to sell any of its shares.

In November 2018, Baker Hughes agreed to a waiver of the lockup, which allowed GE to sell $2.3 billion of Baker Hughes shares through a secondary offering and for Baker Hughes to repurchase $1.5 billion of its shares. Concurrent with these capital market transactions, Baker Hughes and GE amended several operating agreements between Baker Hughes and affiliates of GE. In March 2019, shareholders of Baker Hughes filed a derivative lawsuit against GE and directors of Baker Hughes, alleging that the amended operating agreements and the capital market transactions unfairly favored GE and caused economic harm to Baker Hughes’ shareholders.

Brattle was retained in 2019 to work with the SLC and the SLC’s legal advisors, Abrams and Bayliss and Quinn Emanuel Urquhart & Sullivan. Led by Principals Tim McAnally and Matt O’Loughlin, the Brattle team performed various economic and financial analyses that compared the economic terms of the amended operating agreements with the terms Baker Hughes would likely have received in an arm’s length negotiation with GE (or some other party) after the original operating agreements expired. The team also analyzed the terms of the capital market transactions and compared them with similar precedent transactions. Lastly, Brattle evaluated market commentary from research analysts and Baker Hughes’ stock price in the context of movements in oil prices and Baker Hughes’ peers.

Outcome

After an extensive investigation, and based in part on the analyses conducted by Brattle, the SLC concluded in October 2020 that the Delaware Court of Chancery would likely hold that the 2018 transactions were entirely fair to Baker Hughes and issued a motion to terminate the derivative action. The shareholder plaintiffs opposed the termination of the derivative lawsuit.  In April 2023, Vice Chancellor Lori Will issued an opinion granting the SLC’s motion to terminate.

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Background

In April 2022, Quinn Emanuel Urquhart & Sullivan retained Brattle on behalf of four institutional and corporate investors – Palladian Partners LP, HBK Master Fund LP, Hirsh Group LLC, and Virtual Emerald – that held close to half of Argentina’s GDP-linked, euro-denominated securities issued in 2005 and 2010.

The four funds sued Argentina in 2019, accusing the Republic of rebasing published GDP in order to avoid payments under GDP-linked securities. The four institutional and corporate investors also claimed that Argentina’s failure to publish GDP under an existing series amounted to a breach of contract.

A Brattle team, led by Principal Richard Caldwell, was tasked with analyzing the provisions in the securities. They assessed whether the applicable conditions would have been met for a reference year – specifically, 2013 – and, if so, determined the necessary payment under the securities. The Brattle team also calculated the interest payments owed to bondholders. Mr. Caldwell testified at trial.

Outcome

In April 2023, London High Court Judge Simon Picken ruled in favor of the four institutional and corporate investors, ordering Argentina to pay €1.33 billion plus interest – an amount based on Mr. Caldwell’s calculations. The judgment was in favor of all securities holders; €643 million of the total payment will go directly to the four funds. Argentina is expected to appeal the ruling.

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