GreenTech settlement reduces $35 million Plastech claim to $25,000

By Caroline Salls

Pittsburgh, Oct. 31 – GreenTech Automotive, Inc. and its WM Industries Corp. debtor requested court approval of a contract-related lawsuit settlement that significantly reduces a $35 million claim filed by Plastech Holding Corp. and its former counsel, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the Eastern District of Virginia.

GreenTech said Plastech filed a lawsuit on Oct. 21, 2014, alleging that the GreenTech debtors interfered with a contract between Plastech and Chinese automaker Anhui Jianghuai Automobile Co., Ltd. (JAC), interfered with Plastech’s business relationships with JAC and “conspired with and aided and abetted JAC to breach an alleged fiduciary duty JAC owed to Plastech.”

After Plastech filed a second amended complaint in 2015 and replaced its original counsel with Susman, GreenTech alleges that Plastech and Susman learned that the signature on a framework agreement included in the lawsuit was not authentic and tried to file a third amended complaint to take out the framework agreement.

The Plastech lawsuit was subsequently dismissed because of “bad-faith conduct,” and Plastech appealed the dismissal order.

According to the motion, Plastech filed a $35 million claim in the GreenTech bankruptcy proceedings on May 21, and GreenTech objected to the claim.

However, GreenTech said the court ruled in August that the Plastech claim would be allowed in the amount of $35 million for distribution purposes and $7.5 million for purposes of voting on GreenTech’s Chapter 11 plan.

GreenTech also filed a lawsuit against Plastech and Susman in November 2017, alleging abuse of process, fraudulent misrepresentation, silent fraud, negligent misrepresentation, civil conspiracy and concert of action against both defendants and aiding and abetting against Susman.

Under the proposed settlement, the $35 million Plastech claim will be resolved by a payment by Plastech to GreenTech of $25,000. Also under the settlement, Susman will pay GreenTech $15,000 for a release of claims against Susman in the GreenTech lawsuit.

GreenTech is a Sterling, Va.-based electric vehicle manufacturer. The company filed for bankruptcy on Feb. 26, 2018 under Chapter 11 case number 18-10651.

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