GM thwarts plaintiffs’ $1 billion accord

DETROIT — General Motors Co. thwarted a $15 million settlement between the company’s bankruptcy trust and thousands of plaintiffs that would have forced the automaker to contribute $1 billion in stock, prompting claims of a secret plot cooked up behind closed doors.

The now-derailed deal was intended to resolve hundreds of personalinjury cases stemming from GM’s faulty ignition switches, as well as a classaction suit over millions of vehicles that allegedly lost value due to a series of recalls in 2014. In a letter filed Thursday in U.S. Bankruptcy Court in Manhattan, lawyers for the plaintiffs said GM conspired with the trust to block the accord after GM previously accused the trust and the plaintiffs of engaging in the same behavior in negotiations last week.

GM “undertook a secret, contrived scheme to undermine the settlement agreement through a campaign of threats, intimidation and payoffs,” plaintiffs attorney Edward Weisfelner said in the letter, which was dated Wednesday. “At a minimum, it is the pot calling the kettle black.”

Detroit-based GM had fumed at the settlement and promised a court fight over what it called a “contrived scheme” to extract the $1 billion in stock.

GM has been fighting to move on from the litigation after previously paying at least $870 million to settle claims and an additional $900 million to the Department of Justice to resolve a criminal probe.

GM spokesman Jim Cain said “we are pleased” that the company can continue fighting what it calls bogus personal injury claims in court instead of settling.

“Now the focus can return to where it belongs, which is the merits of the plaintiffs’ remaining claims,” he said in an email. “We will demonstrate that those claims lack merit.”