Market Overview

Eaton Receives Arbitration Decision Related to Legacy Cooper Business


Power management company Eaton (NYSE:ETN) announced that certain
subsidiaries it acquired in the 2012 acquisition of Cooper Industries
have been ordered to pay $293 million by an arbitration panel. The
panel's award, issued on August 23, 2018, is related to claims brought
by Pepsi-Cola Metropolitan Bottling Company, Inc. ("Pepsi").

As Eaton previously disclosed, the dispute related to Pepsi's claims
that it was harmed by a 2011 settlement agreement that resolved
litigation Pneumo Abex, LLC had previously brought against various
Cooper entities. The litigation involved, among other things, a guaranty
related to Pneumo Abex's friction products business. Pepsi claimed that
the value contributed to Pneumo Abex and a newly established trust in
exchange for a release of the guaranty was substantially below
reasonably equivalent value, and that an inability of Pneumo Abex to
satisfy future liabilities may result in plaintiffs suing Pepsi under
various theories. There are no other pending claims related to the
contributions made for the release of the guaranty.

Eaton intends to challenge the arbitration award on several grounds.

Eaton estimates the impact of the arbitration award will be an after-tax
expense of $205 million in the third quarter 2018, reducing third
quarter earnings per share by $0.47.

Eaton is a power management company with 2017 sales of $20.4 billion. We
provide energy-efficient solutions that help our customers effectively
manage electrical, hydraulic and mechanical power more efficiently,
safely and sustainably. Eaton is dedicated to improving the quality of
life and the environment through the use of power management
technologies and services. Eaton has approximately 96,000 employees and
sells products to customers in more than 175 countries. For more
information, visit

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