By Nick Thornton
General Motors has agreed to settle a claim brought by the New York State Teachers’ Retirement System for $300 million, according to court documents.
The claim alleged the teachers’ pension fund
and anyone invested in GM stock between November 17, 2010 and July 24, 2014 lost millions, as a belated recall affecting millions of cars with defective ignition switches drove GM’s stock value down by more than $1 billion.
The company also made material misrepresentations and omissions about its liabilities, internal controls and commitment to safety, according to the initial complaint, which ran nearly 600 pages.
GM agreed to settle the claim before a U.S. District Court for the Eastern District of Michigan ruled on the company’s motion to dismiss the case. As a part of the settlement, GM denies any wrongdoing.
From the beginning of the class period, GM and senior executives repeatedly reported that its recall liabilities were accurately stated under Generally Accepted Accounting Principles.
But starting in 2014, GM made a series of corrective disclosures showing the company knew of safety defects in the ignition switches in millions of cars that should have been recalled “many years earlier,” court papers said.
The complaint alleged that GM knew of some of the defects for as long as 10 years before some of the involved cars were recalled.
The New York State Teachers’ Retirement System pension fund was the lead plaintiff in the class.
The plan serves more than 426,000 participants and beneficiaries, and had over $108 billion assets by the end of June 2014, making it one of the 10 largest public pension
plans in the country. Its funded ratio was 92.9 percent for the period ending June 2014.
In November of 2010, GM issued nearly $16 billion of common stock, as the company emerged from bankruptcy and a government takeover.
NYSTRS reportedly owns about $98 million in GM shares.
Trustees claimed the fund lost more than $6 million in the value of its holdings during the class period.
GM has also settled more than 1,300 death and injury civil claims resulting from the faulty ignition switches, and is paying a $900 million fine to the government to avoid prosecution.
The proposed settlement does not say how much will be collected by NYSTRS. The certified class consists of any person or entity that purchased shares of GM from November 17, 2010 to July 24, 2014.
Originally posted on BenefitsPro.com