Skip to content
Subscriber Only

GM Avoids $1 Billion Stock Payout in Courtroom Battle

  • Judge rules trust acted in bad faith seeking stock trigger
  • Case stems from automaker’s 2009 bankruptcy aftermath
The General Motors Co. headquarters in Detroit, Michigan.

The General Motors Co. headquarters in Detroit, Michigan.

Photographer: Jeff Kowalsky/Bloomberg

Updated on

The trust set up to handle General Motors Co.’s bankruptcy claims acted in bad faith in negotiating a $15 million class-action settlement that would have forced the automaker to contribute as much as $1 billion in new stock, a U.S. judge ruled in throwing out the accord.

Wilmington Trust, the M&T Bank Corp. unit that manages the GM trust, struck the deal to resolve hundreds of personal-injury cases stemming from GM’s faulty ignition switches, as well as a class-action suit over millions of vehicles that allegedly lost value due to a series of recalls. But the trust backed out of the settlement at the last minute, deciding instead to strike a deal with GM for an infusion of cash to keep fighting the plaintiffs in court.