BREAKING NEWS

GM creditor trust drops settlement with ignition switch plaintiffs

Now Reading:

GM creditor trust drops settlement with ignition switch plaintiffs

Text size Aa Aa

By Brendan Pierson NEW YORK (Reuters) – In a blow to people suing General Motors Co <GM.N> over faulty ignition switches and other alleged vehicle defects, a trust that holds many GM liabilities from before its 2009 bankruptcy has cancelled a settlement that sought to force the automaker to pay $1 billion in shares to resolve millions of claims. The claims stem from GM’s 2014 recall of 2.6 million vehicles with defective ignition switches, including one linked to 124 deaths. They have since expanded to include millions of financial loss claims and hundreds of personal injury and wrongful death claims over a variety of alleged defects in millions of cars. The settlement, first disclosed at a court hearing last week, would have called for the trust to accept $10 billion in claims, triggering a provision in GM’s bankruptcy plan that could have forced it to pay $1 billion in stock to the trust to pay off the plaintiffs. GM opposed the settlement. Lawyers for the plaintiffs said in a court filing late on Wednesday they had learned of the “astonishing and improper” decision to jettison the settlement the day before a scheduled court hearing on the matter. “Game isn’t over,” Steve Berman, a lawyer for the plaintiffs, said in an email on Thursday. “We had a deal, GM has knowingly interfered with our deal and we intend to take action against GM on various fronts.” He said the plaintiffs could bring a legal action against GM for interfering with the agreement and seek to seize the trust’s assets. According to a letter filed earlier on Wednesday by the trust and GM, the trust decided to drop the settlement after GM agreed to help pay for the trust to defend against the plaintiffs’ claims. “We are pleased with today’s developments,” GM said in a statement. “Now the focus can return to where it belongs, which is the merits of the plaintiffs’ remaining claims. We will demonstrate that those claims lack merit.” Berman said in an interview last week that the settlement with the trust would have resolved about 11.9 million economic loss claims and between 400 and 500 personal injury and wrongful death claims. About 2.4 million claims, involving vehicles sold after GM’s bankruptcy, would have remained in pending in district court, Berman said.

(Reporting By Brendan Pierson in New York; Editing by Tom Brown)
euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on euronews.com for a limited time.