General Motors 2013 Annual Report Download - page 108

GENERAL MOTORS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
this litigation. At December 31, 2013 we have identified a reasonably possible loss in excess of the amount of our accrual of 165
billion South Korean Won (equivalent to $156 million). Both the scope of claims asserted and GM Korea’s assessment of any or all of
the individual claim elements may change if new information becomes available.
GMCL Dealers’ Claim
On February 12, 2010 a claim was filed in the Ontario Superior Court of Justice against GMCL on behalf of a purported class of
over 200 former GMCL dealers (the Plaintiff Dealers) which had entered into wind-down agreements with GMCL. In May 2009 in
the context of the global restructuring of the business and the possibility that GMCL might be required to initiate insolvency
proceedings, GMCL offered the Plaintiff Dealers the wind-down agreements to assist with their exit from the GMCL dealer network
and to facilitate winding down their operations in an orderly fashion by December 31, 2009 or such other date as GMCL approved but
no later than on October 31, 2010. The Plaintiff Dealers allege that the Dealer Sales and Service Agreements were wrongly terminated
by GMCL and that GMCL failed to comply with certain disclosure obligations, breached its statutory duty of fair dealing and
unlawfully interfered with the Plaintiff Dealers’ statutory right to associate in an attempt to coerce the Plaintiff Dealers into accepting
the wind-down agreements. The Plaintiff Dealers seek damages and assert that the wind-down agreements are rescindable. The
Plaintiff Dealers’ initial pleading makes reference to a claim “not exceeding” Canadian Dollar $750 million, without explanation of
any specific measure of damages. On March 1, 2011 the court approved certification of a class for the purpose of deciding a number
of specifically defined issues including: (1) whether GMCL breached its obligation of “good faith” in offering the wind-down
agreements; (2) whether GMCL interfered with the Plaintiff Dealers’ rights of free association; (3) whether GMCL was obligated to
provide a disclosure statement and/or disclose more specific information regarding its restructuring plans in connection with
proffering the wind-down agreements; and (4) assuming liability, whether the Plaintiff Dealers can recover damages in the aggregate
(as opposed to proving individual damages). A number of former dealers have opted out of participation in the litigation, leaving 181
dealers in the certified class. Trial of the class issues is scheduled to occur in the third quarter of 2014. The current prospects for
liability are uncertain, but because liability is not deemed probable we have no accrual relating to this litigation. We cannot estimate
the range of reasonably possible loss in the event of liability as the case presents a variety of different legal theories, none of which
GMCL believes are valid.
UAW Claim
On April 6, 2010 the UAW filed suit against us in the U.S. District Court for the Eastern District of Michigan claiming that we
breached an obligation to contribute $450 million to the UAW Retiree Medical Benefits Trust (New VEBA). The UAW alleges that
we were contractually required to make this contribution. On December 10, 2013 the court granted our motion for summary judgment
and dismissed the claims asserted by the UAW, holding that the relevant agreement is unambiguous and does not require the payment
sought. The UAW has appealed. At this juncture, we believe the prospects for liability on the claims asserted in this matter are remote.
Nova Scotia Claims Litigation
We were a participating party-in-interest in proceedings pending in the U.S. Bankruptcy Court for the Southern District of New
York to adjudicate claims in the Old GM bankruptcy arising from certain securities issued by General Motors Nova Scotia Finance
Company (Nova Scotia Finance), an Old GM subsidiary which we did not acquire in 2009 (Nova Scotia Claims Litigation). Although
the proceedings involved no claims against us, they presented issues which, depending upon their resolution, could have resulted in
future claims against GMCL. In December 2013, pursuant to the agreement, GMCL paid $50 million to, or as directed by, the Trustee
of Nova Scotia Finance and we (including our subsidiaries and affiliates) were released from all claims relating to Nova Scotia
Finance, the Nova Scotia Claims Litigation and the transactions at issue in the litigation.
Product Liability
With respect to product liability claims involving our and Old GM’s products, we believe that any judgment against us for actual
damages will be adequately covered by our recorded accruals and, where applicable, excess liability insurance coverage. Although
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2013 ANNUAL REPORT