New York State Teachers' Retirement System v. General Motors Company
|Court:||U.S. District Court, Eastern District of Michigan|
|Judge:||Hon. Linda V. Parker|
|Case Contacts:||Salvatore J. Graziano, Gerald H. Silk, James A. Harrod, Adam H. Wierzbowski, Rebecca E. Boon|
This securities class action against General Motors Company ("GM" or the "Company") -- the maker of Buick, Cadillac, Chevrolet, and GMC vehicles -- arose from a series of alleged misrepresentations concerning the quality, safety, and reliability of the Company's cars, which defendants represented were vigorously tested before being offered to customers.
Lead Plaintiff Achieves a $300 Million Settlement
Lead Plaintiff New York State Teachers’ Retirement System, on behalf of itself and the Settlement Class, as defined in the Notice, reached a settlement of the Action for $300,000,000 in cash (the “Settlement”) that resolves all claims in the Action. The Claim Filing Deadline for the Settlement was April 27, 2016. For more information about the Settlement, you may visit www.GMSecuritiesLitigation.com.
On May 19, 2016, the Court entered an Opinion and Order approving the Settlement as fair, reasonable and adequate, approving the Plan of Allocation, and awarding attorneys' fees and expenses.
On June 13, 2016, a class member who had objected to the approval of the Settlement in the District Court appealed the judgment approving the Settlement. The Sixth Circuit Court of Appeals denied that appeal on November 27, 2017. The objector filed a petition for certiorari to the U.S. Supreme Court and, on October 29, 2018, the Supreme Court denied the objector’s petition, resolving the appeal.
Following the resolution of the appeal, Lead Plaintiff filed a motion with the District Court for approval of the proposed Distribution Plan. The Court approved that motion on May 21, 2019, and, pursuant to the Court’s Order, on July 31, 2019 the Claims Administrator began mailing checks to Settlement Class Members who had submitted eligible claims. A second distribution is scheduled for the fourth quarter of 2020.
On February 13, 2014, GM announced a recall of 779,000 cars, including the Company's 2005-2007 Chevrolet Cobalt and the 2007 Pontiac G5, because of defects with their ignition switches. Specifically, the defect enabled the ignition switch key to move out of position, causing the car to shut off and critical safety features to become disabled. GM also disclosed on February 13 that there have been 22 crashes involving its cars where the airbags did not deploy, including five crashes that caused six deaths.
On February 25, 2014, GM more than doubled its recall related to the ignition switches, recalling an additional 842,000 cars including: Saturn Ion compact cars from 2003-2007; Chevy HHR mid-sized vehicles from 2006 and 2007; Pontiac Solstice and Saturn Sky sports cars from 2006 and 2007; and the Opel GT Roadster from 2007. The two recalls affected over 1.6 million GM cars worldwide. GM also said that it had underreported the amount of accidents and fatalities caused by its defective ignition switch when it first announced the recall, and that the problem actually caused 31 accidents including 13 fatalities.
Then, on March 11, 2014, the U.S. Justice Department, the U.S. Attorney for the Southern District of New York, as well as the U.S. Senate Committee on Commerce, Science and Transportation announced that they were investigating GM's handling of the ignition switch recall in order to determine whether the Company violated criminal or civil laws by failing to notify regulators about the switch failures. Further, the U.S. House of Representatives' Energy and Commerce Committee also asked GM CEO Mary Barra for documents and field reports related to the recall. These disclosures caused the price of GM stock to drop from $37.09 per share to $35.18 per share -- the largest one-day decline in more than two years -- and erased over $2.4 billion in market capitalization.
On October 24, 2014, the Honorable Linda V. Parker appointed BLB&G's client the New York State Teachers' Retirement System as Lead Plaintiff and BLB&G as Lead Counsel for the Class. New York State Teachers’ Retirement System proceeded to filed its Consolidated Class Action Complaint on January 15, 2015. After Defendants’ motions to dismiss were fully briefed on July 10, 2015, Lead Plaintiff entered into the Settlement with Defendants and, on November 20, 2015, Judge Parker granted preliminary approval of the Settlement. The Court held a hearing on final approval of the Settlement on April 20, 2016 and entered an Opinion and Order approving the Settlement on May 19, 2016.
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