Lawyers Seek Another $1 Billion From General Motors Over Ignition-Switch Defect
August 11 2017 - 3:03PM
Dow Jones News
By Mike Colias and Mike Spector
Lawyers are alleging that General Motors Co. is on the hook for
an additional $1 billion to address claims stemming from faulty
ignition switches, the latest legal wrangling over a safety defect
that continues to dog the Detroit auto maker years after a recall
that triggered widespread investigations and settlements.
Lawyers representing car-accident victims and customers seeking
recompense for declining vehicle values have reached a tentative
settlement with a trust for creditors of so-called Old GM, the
remnants of the auto giant left behind as part of its $50 billion
government rescue and bankruptcy restructuring.
The trust is now seeking $1 billion in GM stock from the auto
maker to cover the claims. A plaintiffs' lawyer outlined the
tentative settlement terms during a court hearing in New York on
Friday morning.
GM, in a statement, said the other parties "secretly plotted"
without its input, calling the trust's request "ridiculous" and
part of "an unfair, unjust and improper scheme" to force the auto
maker to pay for claims lacking merit.
"We will aggressively protect our rights and our shareholders,"
the company said, adding it would work to hold the trust and
plaintiffs "accountable for their bad faith and improper
actions."
Steve Berman, a plaintiffs' lawyer at Hagens Berman Sobol
Shapiro LLP involved in the settlement discussions, said the trust
took proper actions allowed under terms of GM's 2009
bankruptcy-sale order. That sale sent assets to a new company owned
by the U.S. Treasury while leaving undesired liabilities behind
with Old GM.
"The notion that we've done anything but follow the terms of the
sale agreement or done anything wrong are unfounded," Mr. Berman
said in an interview, adding that he hoped to present a judge with
a signed settlement as soon as Tuesday.
A lawyer for Old GM's general unsecured creditors' trust
declined to comment.
Write to Mike Colias at Mike.Colias@wsj.com and Mike Spector at
mike.spector@wsj.com
(END) Dow Jones Newswires
August 11, 2017 14:48 ET (18:48 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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