Lawyers Seek Another $1 Billion From General Motors Over Ignition-Switch Defect

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 [e-mail] and Mike Spector at [e-mail]

(END) Dow Jones Newswires

August 11, 2017 14:48 ET (18:48 GMT)

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