GE Wins a Round in Lawsuit Battle
CBJ — A U.S. federal judge has partially dismissed a lawsuit by investors in General Electric that accused the company of concealing $24 billion in insurance liabilities and using fraudulent accounting to prop up its power business.
The New York judge granted the shareholders permission to amend their complaint. The class-action lawsuit was first announced about two years ago and consolidates six cases that sought to hold GE and its senior leaders accountable for falling profits in recent years.
The suit is backed by about 15 U.S. and foreign pension plans, retirement funds and investors in GE. The company and forrmer CEOs Jeff Immelt, John Flannery and other senior executives are among those named. The suit alleges the defendants understated GE’s exposure to long-term care insurance risks and risks related to its long-term service agreements with customers that bought power plant equipment from GE.