A U.S. bankruptcy judge has ruled a $1 billion settlement over General Motors’ faulty ignition switch claims cannot be enforced, a major blow to affected owners.
Judge Martin Glenn issued the verdict and threw out the settlement, which would have issued $1 billion worth of stock to owners of cars fitted with defective ignition switches, The Detroit Free Press reported. The settlement would have covered millions of claims over economic loss and between 400 and 500 personal injury and wrongful death claims.
After the trust, which handles “Old GM’s” liabilities prior to bankruptcy, met with “New GM” last August, the trust walked back on the $1 billion settlement. Lawyers for the car owners never officially signed the deal. Previously, Judge Glenn said the whole ordeal didn’t pass the “smell test,” but GM’s lawyer argued, “Sometimes people simply get cold feet.”
GM has already paid $2.5 billion to settle other various claims over its faulty ignition switches, which were officially linked to 124 deaths. GM also paid a $900 million charge to drop all criminal investigations at the Department of Justice.