Friday, 18 August 2017

GM accused of threats and meddling

Reuters reports that General Motors Co (GM) has been accused of meddling in settlement talks and issuing threats that led to the cancelling of an agreement.

Lawyers for those car owners affected by faulty ignition switches (linked to GM's 2014 recall of 2.6 million vehicles) say that an agreement (which had taken five months to prepare) was now being queried by the trust working on behalf of GM with the trust now saying it had accepted GM's offer to help pay for the trust to defend against the car owners' claims in exchange for dropping the agreement.

'We uphold, but have no reason to know this for a fact, that the trust's about-face was the subject of...some very direct, very serious threats issued either by GM or GM's professionals,' plaintiff lawyer, Edward Weisfelner said.

Lawyers for GM and the trust, who were also present in court, rejected the allegations.

'I was at that meeting. The concept that there were any untoward threats or anything illicit...it just did not happen,' said Keith Martorana, an attorney for the trust.

GM's lawyer, Arthur Steinberg, said he did not consider the previous agreement between the trust and the plaintiffs to be binding because it had not been signed.

Bankruptcy judge Martin Glenn said he had to take allegations over threats seriously and ordered both sides to agree on a discovery process to unearth the details of the discussions that led to the agreements.

He also said he would not approve any of the settlements before the parties briefed him on how they would go about obtaining evidence.

'Anybody who negotiates a settlement with you better be careful as you might pull the rug out from underneath them after months of negotiations,' the judge told Martorana.

The original settlement would have called for the trust to accept $10bn in claims to resolve about 11.9 million allegations over economic loss and between 400 and 500 personal injury and wrongful death claims.