GM directors escape shareholder lawsuit over ignition switch recall image

General Motors, the largest US automaker and the third biggest in the world, has recently announced a Delaware judge decided to dismiss a lawsuit brought by disgruntled investors over the company’s ignition switch recall conundrum.

The lawsuit was initiated by shareholders looking to gain back losses stemming from the automaker’s recall of millions of vehicles equipped with defective ignition switches. The faulty parts have been linked to more than one hundred deaths and hundreds of injuries, while the initial recall of 2.6 million autos later on prompted a GM overview of safety procedures that led to many more millions of vehicles to be recalled. The Delaware judge decided on Monday that plaintiffs’ had no evidence the company’s management acted in bad faith and decided to throw away the case. The shareholders claimed the GM directors went out of their way by failing to oversee the operations of the company, allowing the recall scandal to reach epic proportions and leading to massive losses for the automaker.

The news comes as a new blow to plaintiffs suing GM for losses from the defective ignition switches, after last month a U.S. bankruptcy judge put on hold dozens of lawsuits accusing the company of concealing the defect as the plaintiffs had to appeal an earlier ruling that barred their cases. Still, there are three other shareholder actions against the carmaker, in Wayne County, Michigan and two in Federal District Court for the Eastern District of Michigan. The complaints have been put on hold pending the Delaware suit outcome, meaning the automaker might secure wins in the other courts as well.

Via Reuters