Things don’t seem to be looking better for GM. The automaker is now working on paying $277 million to settle a shareholder lawsuit stating that the General misled its investors in reporting its financial condition leading to a inflating of its stock price. $26 million of the $227 million comes from Deloitte & Touche who is the independent auditor for GM.
The charge was initiated in the second quarter but the payment will be accounted in the third quarter. GM said that $200 million of the payment will most likely be covered by by insurance.
Two divisions of a German bank brought about the lawsuit in 2006 saying that they lost money by buying GM stock and debt at a price that was higher than it would’ve been if GM reported its financial information properly.
Source: Automotive News (Subscription Required)