GM Avoids $1 Billion Stock Payment Over Secret Settlement

The trust set up to handle General Motors Co.’s bankruptcy claims acted in bad faith in negotiating a $15 million class-action settlement that would have forced the automaker to contribute as much as $1 billion in new stock, a U.S. judge ruled in throwing out the accord.

Wilmington Trust, the M&T Bank Corp. unit that manages the GM trust, struck the deal to resolve hundreds of personal-injury cases stemming from GM’s faulty ignition switches, as well as a class-action suit over millions of vehicles that allegedly lost value due to a series of recalls. But the trust backed ...