A Michigan federal judge has given final approval to a $300 million settlement that was agreed to in a shareholder class action alleging that General Motors’ concealment of deadly ignition-switch defects damaged its stock prices. U.S. District Judge Linda V. Parker approved the settlement approximately six months after the New York State Teachers’ Retirement System asked for approval of the settlement ending claims that General Motors Co.’s stock price was inflated during a period when the company allegedly concealed ignition-switch defects that killed at least 124 people when their cars shut down mid-drive. Judge Parker said:
The court finds the settlement and plan of allocation to be fair, adequate, and reasonable to the settlement class and therefore is granting final approval of the settlement and the plan of allocation.
While a number of individuals objected to the settlement, Judge Parker found the objectors’ contentions lacked merit. She ruled that the complexity of the case, the likelihood of success, class counsel’s opinions and the public interest all favor approval. Judge Parker said she approved both the Plaintiff’s motion for final approval of the settlement and approval of the plan allocation and its motion for an award of attorneys’ fees and reimbursement of litigation expenses.
According to the Plaintiffs, GM’s stock value steadily and substantially dropped after it became evident that GM held off on fixing an ignition switch problem in several older-model cars, including Chevrolet Cobalts and Saturn Ions. The initial complaint in the case was filed in March 2014, the month after GM began its recalls, and a consolidated class action complaint was filed in January 2015.
The New York teachers’ pension fund was selected as lead Plaintiff in October 2014. The suit covers stock bought from Nov. 17, 2010, the day the new GM was born out of the old GM’s bankruptcy, to July 2014. The stock price declined from $37.09 in March 2014 to $31.93 in April 2014 as information started coming out. That was what the lawsuits called the first wave. Three months later, there was another during which the price fell from $37.41 on July 23 to $35.74 on July 24, according to the complaint.
The investors are represented by Salvatore J. Graziano and James A. Harrod of Bernstein Litowitz Berger & Grossmann LLP and E. Powell Miller, Marc L. Newman and Sharon S. Almonrode of The Miller Law Firm PC. The case is New York State Teachers’ Retirement System v. General Motors Co. et al., in the U.S. District Court for the Eastern District of Michigan.
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