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Bombardier has reached a settlement to resolve a shareholder lawsuit concerning its divestitures. The terms of the agreement remain confidential. The legal dispute originated in 2022 when Bombardier noteholders filed a complaint with the New York Supreme Court. They alleged that the Canadian manufacturer breached lending covenants by divesting its transportation business, regional jet program, and aerostructures division.
In response to these allegations, Bombardier stated at the time that it “believes that these allegations are without merit and intends to vigorously defend itself against the action. The corporation believes it is not and has never been in breach of any covenant under the relevant indenture and that the actions taken by it in May 2021, with the support and consent of the requisite holders of the relevant debt securities of the corporation, were fully compliant with the terms of the indentures under which such notes were issued.”
The settlement includes a consent from noteholders "that the divestiture transactions referred to in the lawsuit did not give rise to any default under the Indenture," according to Bombardier. Despite strongly believing that "the allegations in this case were without merit," Bombardier decided it was "in the best interest of the company and all its stakeholders to settle this lawsuit and concentrate on its core business operations."
