General Motors Corp. has agreed to pay $277 million to settle a shareholder lawsuit contending the automaker made false and misleading statements. Deloitte & Touche, which was GM’s outside auditor, is contributing an additional $26 million cash payment, bringing the total settlement value to $303 million. General Motors disclosed the settlement in a regulatory filing on August 7th. The parties had reached an agreement in principle in July. The settlement is subject to the negotiation of a formal agreement, which was to be filed with the court in late August or early this month.
GM will be required to pay one-half of the money into an escrow account within 30 days of preliminary court approval of the settlement, and the other half into an escrow account in January 2009. The case is being overseen by a federal judge in Michigan. In the regulatory filing, GM also disclosed the tentative settlement of a separate lawsuit brought by shareholders, agreeing to make unspecified changes to its corporate governance rules.
Earlier this year, Deloitte and Delphi Corp. reached a similar settlement with shareholders of the auto parts supplier. In February, the same judge from the GM case tentatively approved a $38.25 million payment from Deloitte as part of a $325 million settlement to investors who claimed misconduct by Delphi and those who oversaw its finances.
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