Pomerantz Appointed Co-Lead Counsel in Honeywell Securities Litigation

On December 3, 2020, U.S. District Judge William J. Martini of the District of New Jersey appointed Pomerantz LLP as Co-Lead Counsel on behalf of Co-Lead Plaintiff Iron Workers Local 580 – Joint Funds in Kanefsky v. Honeywell International Inc., 18-cv-15536 (D.N.J.), a securities litigation being pursued on behalf of a class of defrauded investors concerning allegations that Honeywell International Inc. (“Honeywell” or the “Company”) issued repeated misstatements about its asbestos liabilities. 

Honeywell is a multinational conglomerate that makes a variety of commercial and consumer products, engineering services, and aerospace systems.

The Company previously owned Bendix Friction Materials (“Bendix”), a brake manufacturer. Despite known health hazards, Bendix used asbestos in its brake and clutch pad products until 2001. Honeywell sold Bendix in 2014.

The complaint alleges that that throughout the Class Period, defendants made materially false and misleading positive statements to investors regarding the Company's business, operational and compliance policies. At the same time, defendants failed to disclose that Honeywell's Bendix asbestos-related liability was greater than initially reported and that the Company maintained improper accounting practices in connection with its Bendix asbestos-related liability.

On August 23, 2018, Honeywell disclosed that “the Company’s Bendix asbestos-related liability is estimated to be $1,693 million as of June 30, 2018.  This is $1,083 million higher than the Company’s prior estimation.”  Honeywell further advised investors that “Bendix asbestos-related insurance assets are estimated to be $187 million as of June 30, 2018, which is $65 million higher than the Company’s prior estimate.”  

Then, on October 19, 2018, Honeywell filed a quarterly report with the SEC for the quarter ended September 30, 2018.  In its quarterly report, “Honeywell advised investors that the SEC’s Division of Corporate Finance had reviewed Honeywell’s prior accounting for liability for unasserted Bendix-related asbestos claims” and that “[o]n September 13, 2018, following completion of Corporation Finance’s review, the SEC Division of Enforcement advised that it has opened an investigation related to this matter.” 

On this news, Honeywell’s stock price fell $1.72 per share, or 1.11%, to close at $153.47 per share on October 19, 2018.  Over the following three trading sessions, Honeywell’s stock price fell by an additional $7.87, or 5.3%, to close at $140.72 per share on October 24, 2018.

Pomerantz’s litigation is led by Partner Joshua B. Silverman.