NEW YORK--(BUSINESS WIRE)--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.
Hagens Berman Sobol Shapiro LLP is a consumer-rights class-action law firm with 11 offices nationwide. The firm has been named to the National Law Journal’s Plaintiffs’ Hot List eight times. More about the law firm and its successes can be found at www.hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.