Dale M. Maas, Attorney at Law
888-680-3843 Wills, Trusts and Successions Real Estate and Business Litigation General Litigation and Appeals

GE faces allegations of fraud over oil merger

We've spent some time on this blog discussing the benefits of mergers and acquisitions. These processes can help companies expand their operations, reduce their costs, and penetrate new markets. As helpful as mergers and acquisitions can be, though, they must be carried out carefully. Those agreements that are inadequate or lack transparency can result in business litigation, as evidenced by one recently filed lawsuit.

There, a claim was filed against General Electric Co., accusing the conglomerate of fraudulently duping oil giant Baker Hughes Inc. into a merger in 2017. According to the lawsuit, GE unfairly took advantage of the bad publicity Baker Hughes faced after a similar merger with Halliburton floundered. Some reports accuse GE of initiating the merger with the sole purpose of hiding several billions of dollars worth of losses inside the newly acquired business. In fact, the lawsuit alleges that GE baited the other company into the merger agreement with false financial records that wouldn't stand up to an independent audit.

This claim is nothing small. In fact, GE is accused of perpetuating a $38 billion fraud, which is nearly half of the business's entire value. The man who uncovered the Bernie Madoff Ponzi scheme has accused the company of understating many of its liabilities, overstating its cash flow, and engaging in improper accounting techniques when it acquired the other business. These accusations, which GE denies, have hit the company's stock hard, rocking its already unsteady reputation.

Mergers, acquisitions, and other business deals need to be handled with care. When these practices are improperly utilized, the ramifications can be deep, broad, and long-lasting. This is why Baton Rouge area business that are considering how best to deal with these matters are better off working with an attorney who knows the law and how to use it in an ethical and effective way.

No Comments

Leave a comment
Comment Information

Dale M. Maas, Attorney at Law
11777 Justice Avenue
Baton Rouge, LA 70816

Toll Free: 888-680-3843
Phone: 225-754-9864
Fax: 225-296-5778
Map & Directions

Best Estate Planners in Baton Rouge
}