Nick Even in Law360: Securities Suits vs. GM Face Hurdles

04/30/2014


Shareholders accusing General Motors Co. of defrauding its investors by concealing an ignition switch defect that caused several fatal crashes and sent stock prices plummeting have a budding arsenal for their fight against the beleaguered automaker, but experts say there are big hurdles to clear at the outset of litigation.

The stock's value has steadily and substantially dropped after allegations surfaced that GM held off on fixing an ignition switch problem in several older-model cars, including Chevrolet Cobalts and Saturn Ions, that triggered at least a dozen deaths and more than 30 crashes. At least one suit has landed in federal court, with other derivative suits taking aim at GM's board cropping up...

As additional suits are filed or other plaintiffs firms and shareholders step in to take charge, the complaint could take on a more definitive shape — one that could put the case in a better position to clear a motion to dismiss, said Nick Even, who heads the securities and class action litigation group at Haynes and Boone, LLP.

“Right now, this complaint is basically resting on should have, could have, would have,” he said. “Those kinds of allegations won't cut it in the long run.”

Excerpted from Law360, April 30, 2014. To view full article, click here (subscription required).

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