Turnarounds & Workouts Names Garrett Motion Restructuring Among 2021’s Most Successful Restructurings

February 9, 2022

S&C was recognized for their role in the Garrett Motion restructuring, which was named one of Turnaround & Workout’s Successful Restructurings of 2021.
 
S&C served as lead debtor’s counsel for Garrett Motion on its global restructuring and successful emergence from Chapter 11 in April 2021. Prior to filing, Garrett’s otherwise strong business was hobbled by excessive leverage and long-term indemnification obligations to Honeywell International, from whom Garrett had separated by spin-off in 2018.  S&C helped Garrett design and complete an innovative Chapter 11 case organized around the forced termination of the indemnity and the refinancing of the company as part of a competitive auction process. The S&C team prevailed in contentious litigation and guided the auction process that started with a $2.1 billion stalking horse bid and ended when two private equity funds agreed to acquire major stakes in the company in a transaction valuing Garrett at $3.1 billion.
 
The auction’s success permitted Garrett’s stockholders to retain a significant equity interest in the reorganized company and an option to have their equity converted into cash—an exceptional achievement in Chapter 11. All creditors were paid in full, other than those who agreed to take negotiated reductions, and the company's new common stock commenced trading on Nasdaq on May 3. The S&C team also helped Garrett raise more than $1.3 billion in new preferred stock and emerge with an appropriate capital structure, leverage ratio and balance sheet.
 
Andy Dietderich and Brian Glueckstein led the S&C team.