In a derivative case arising out of affiliate transactions between oil field services company Baker Hughes and its controlling shareholder, General Electric (GE), Brattle was retained to assess whether a series of amended operating agreements and financing transactions with GE unfairly favored GE and caused economic harm to Baker Hughes’ shareholders. Brattle served as financial advisor to the Special Litigation Committee (SLC) of Baker Hughes.


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.


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.