Proposed Settlement in GM Ignition Switch Lawsuit Could Mean $1.14 Billion Payout for Car Owners who Bought Their Defective GM Cars Before July 10, 2009

05/03/2018

If approved by the Bankruptcy Court, settlement could trigger 30 million share payout from GM

NEW YORK – A proposed settlement in the General Motors ignition switch lawsuit could trigger GM’s obligation to transfer 30 million shares to the bankruptcy Trust, adding over $1 billion to a settlement fund to pay economic loss and injury claims brought by owners of GM vehicles affected by a barrage of safety defects, according to Hagens Berman.

Attorneys representing owners of affected GM vehicles announced the proposed settlement with the General Unsecured Creditors Trust (GUC Trust) in the Bankruptcy Court today, which would lead to a multi-step process, if approved by the Bankruptcy Court:

•             The GUC Trust would pay $15 million into a settlement fund and pay additional amounts to cover the costs of providing notice to owners of the affected vehicles.

•             The GUC Trust would seek an order from the Bankruptcy Court estimating the value of the defective GM vehicle owners’ claims.  The Court would hold a hearing, and if the Court values the total amount of claims at $10 billion or more, the proposed settlement would trigger an obligation by GM to deliver 30 million shares of GM common stock to the settlement fund. A valuation at less than $10 billion could still cause GM to contribute shares to the settlement fund, but in a lesser amount.

According to attorneys, the current value of 30 million GM shares is approximately $1.14 billion. This sum would be added to the settlement fund and used to pay economic loss and personal injury/wrongful death claims.

“The proposed settlement will achieve what we have fought to accomplish in the Bankruptcy Court since the case’s inception: force GM to pay its dues to its own consumers it sought to deceive,” said Steve Berman, managing partner of Hagens Berman and co-lead counsel representing vehicle owners against GM in the ignition-switch lawsuit.

“GM’s sale of knowingly defective cars, its failure to issue timely recalls, and its failure to provide GM vehicle owners with notice of the right to submit claims to the Bankruptcy Court has shattered the lives of individuals and families, and we believe they have waited long enough,” Berman added.

The lawsuit, which began in the spring of 2014, stemmed from GM’s attempted cover-up of ignition switch, side airbag and power steering safety defects, which led to fatalities and crashes, as well as a record-setting number of recalled vehicles. The defects affected millions of owners, and yet GM failed to adequately notify owners, instead attempting to quell panic over ongoing reports of defects and injuries.

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01/18/18: Statement from Steve W. Berman

Statement from Steve W. Berman regarding the U.S. Bankruptcy Court's Memorandum Opinion and Order, Signed on 1/18/2018, Regarding Motion to Enforce the Settlement Agreement by and Among the Signatory Plaintiffs and the GUC Trust:

"We are of course disappointed in the result but are thankful that the Court reviewed the issue so carefully and is committed to quickly resolving late claims motions.  All parties will have to assess next steps, including whether Wilmington Trust should be removed as trustee given the Court’s unequivocal findings that Wilmington Trust acted in bad faith."

— Steve W. Berman, managing partner of Hagens Berman
representing plaintiffs against GM

 

Read the court's order »

12/19/17: Case Update

Hagens Berman's Steve Berman in Court Fighting GM's Attempt to Kill $1B Ignition Switch Claims Settlement

Read more at Law360 (paywall) »

08/17/17: Statement from Steve W. Berman

“As the documents we filed demonstrate, all parties confirmed we had a deal and authorized us to share that deal with GM. GM then interfered with that deal, and we intend to take appropriate action against GM and possibly those who assisted GM in causing the GUC Trust to breach the contract. In addition, the GUC Trust is a fiduciary to all creditors, including our clients in this case who were denied due process by GM's concealment. The GUC Trust should be acting to protect claimants and not GM.”

— Steve W. Berman, managing partner of Hagens Berman
representing plaintiffs against GM

Read the filed letter from plaintiffs' attorneys »

04/24/17: Supreme Court rejects GM bid to block ignition switch suits

On Apr. 24, 2017, the Supreme Court refused to hear GM’s appeal regarding the pending lawsuits concerning the deadly ignition-switch defect linked to 124 deaths and 275 injuries. The automaker had claimed the lawsuits brought regarding the defect were barred by its 2009 bankruptcy. The court’s decision allows the cases to continue for plaintiffs represented by Hagens Berman.

09/15/16: Fourth Amended Complaint

09/15/16 Hagens Berman files fourth amended complaint against General Motors on behalf of hundreds of owners. Download Complaint »

07/13/16: Major Victory: Appeals Court Reverses GM Bankruptcy Protection

The U.S. Second Circuit Court of Appeals in Manhattan ruled that General Motors (NYSE: GM) must face certain claims relating to cars made before its 2009 bankruptcy.

The ruling is a major victory for a class of millions of owners of GM-branded vehicles in the ignition switch multi-district litigation, claiming that the automaker’s series of recalls and cover-ups irrevocably damaged GM’s brand and led to significant loss of vehicle value. read more »

02/10/16: Cooper Motion Denied

"We are gratified that the court found Mr. Cooper’s allegations to be without merit. The court’s ruling allows the Hagens Berman legal team to return to focusing on the cases we are leading against GM." —Steve W. Berman, Managing Partner Download Order »   Read Release »

01/15/15: Steve Berman Responds to Valukas Report:

Regarding GM's internal report from investigator Anton Valukas, Steve Berman responded, "We are disappointed, but at least we get the identification of the witnesses he interviewed who weren’t disclosed. I can also say that after we have been looking at the documents we will show that the Valukas report is flawed and is a serious misstatement of who knew what about the ignition switch defect at GM.”