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The U.S. Justice Department is weighing charging General Motors Co. with criminal wire fraud stemming from the auto maker’s failure to recall millions of vehicles equipped with a defective ignition switch, the Wall Street Journal reported today. Federal prosecutors in New York are focusing on the charge after determining GM likely made misleading statements and concealed information about the faulty switch, now linked to more than 100 deaths. They are hoping to reach a settlement with the company by the end of summer or early fall, though the timing could slip. Prosecutors also could explore other kinds of possible criminal wrongdoing in the GM case. In the GM probe, Manhattan U.S. Attorney Preet Bharara is building on an unprecedented settlement with Toyota Motor Corp. in March of last year. Prosecutors charged Toyota with wire fraud under a unique legal theory that effectively punished the Japanese company not for producing defective products, but for allegedly defrauding customers by making misleading statements about its cars’ safety after complaints of unintended acceleration.

Montreal Maine & Atlantic Railway Ltd., the company behind a deadly 2013 oil train derailment in Quebec, Monday has another $110 million for its fund to help compensate the victims of the crash, the Wall Street Journal reported today. World Fuels Services, the company that owned the oil shipment, said that it has agreed to pay into the compensation fund established for the victims of the derailment. The oil supplier’s contribution brings the amount raised for the victims’ fund to $345 million (C$431,500,000). MM&A sought the protection of U.S. and Canadian courts in August 2013 after being hit with an avalanche of personal-injury, wrongful-death and environmental claims following the derailment of an unmanned train carrying crude oil from North Dakota’s Bakken region, which leveled the town of Lac-Mégantic, Quebec, and killed 47 people.

Class action lawyers suing General Motors Co. over its fatal ignition-switch problems have lined up several of the automaker’s top lawyers and ex-lawyers for questioning over the next few months, including former general counsel Michael Millikin and outside counsel Anton Valukas, Corporate Counsel reported today. Texas attorney Bob Hilliard, co-lead attorney in the multidistrict class action against GM, has prepared a list of 55 people to be deposed. Millikin, who was replaced as general counsel on March 1 and is set to retire in July, is scheduled for questioning on Aug. 26. He has denied any wrongdoing in the delayed recall of 2.6 million vehicles with faulty ignition switches that have been blamed for 109 deaths and more than 200 injuries. A GM internal investigation prepared by outside counsel Anton Valukas, of Jenner & Block, essentially blamed incompetence and poor communications for the nearly decade-long delay. Valukas is scheduled to be deposed Sept. 24.

A U.S. bankruptcy judge on Wednesday put on hold dozens of lawsuits accusing General Motors Co. of concealing an ignition-switch defect while the plaintiffs in those cases appeal an earlier ruling that found their cases were barred, Reuters reported yesterday. GM had argued that claims for vehicles predating its 2009 exit from chapter 11 bankruptcy should be dismissed, following Bankruptcy Judge Robert Gerber’s April 15 ruling that the company was shielded from those claims by the terms of its bankruptcy. Plaintiffs said that the cases should be stayed pending a resolution of their appeal. Judge Gerber said on Wednesday that it would be procedurally “cumbersome” to dismiss the cases, as GM requested, in case a higher court overturned his decision. Instead, the cases would be “simply stayed for the time being.” Gerber added that, if his decision was upheld, GM could renew its request.

Highland Capital Management is suing Credit Suisse Group AG for more than $500 million, the hedge fund firm’s latest salvo in efforts to recoup some losses from the Swiss bank’s ill-fated loan program to developers of luxury properties in the U.S., the Wall Street Journal reported yesterday. In a lawsuit filed on Friday in state court in Dallas, Highland’s lawyers accused Credit Suisse of using their settlement talks, which took place over a period of years, as “a way to keep a lid on its bad behavior” while the statute of limitations ran out on other investors’ claims totaling billions of dollars. Credit Suisse spokesman Drew Benson dismissed the lawsuit as an attempt by Highland to revive its legal claims in Texas after a judge in New York rejected them. Credit Suisse previously has denied wrongdoing in connection with the loan program. The bank also maintains that any verdict in favor of Highland will be set aside or offset by other credits and that the bank will ultimately not have to pay any damages to Highland.

The Roman Catholic Diocese of Gallup, N.M., which stretches across 55,000 square miles of northern Arizona and New Mexico, is seeking to sell 55 parcels of mostly vacant desert land to help fund a settlement with about 60 alleged victims of clergy sexual abuse, the Wall Street Journal reported today. The diocese in a court filing last week asked Bankruptcy Judge David Thuma for permission to hire two real-estate brokers and to move forward with an auction process for the properties. The auction will be held 50 to 60 days after the judge signs off on the request, according to court papers.

Federal prosecutors are likely to bring criminal charges against General Motors Co. over an ignition-switch defect linked to more than 100 deaths, but they still have to hash out key issues with GM including whether the auto maker will need to plead guilty and how big a fine it will have to pay, the Wall Street Journal reported today. Prosecutors have conveyed to GM that a settlement is likely and have had initial conversations about a deal in recent months, but the contours have yet to be set. One of the major sticking points between prosecutors and the company is likely to center on whether GM will plead guilty or enter a so-called deferred-prosecution agreement. A deferred-prosecution agreement would mean the company would face charges that would be suspended and ultimately dismissed if it abides with prosecutors’ terms. A guilty plea carries more risk for a company. GM’s cooperation with prosecutors could allow it to escape with a lighter fine that in any case is expected to top $1 billion.

New York lawmakers are weighing a bill to make foreign companies submit to the jurisdiction of New York courts as a condition of doing business in the state, a position some lawyers say is at odds with a recent U.S. Supreme Court ruling, the Wall Street Journal reported today. The high court decided unanimously last year to put restrictions on lawsuits filed against foreign companies in the U.S. that concern actions that took place abroad. Defense lawyers hailed the decision as a strike against “litigation tourism,” the filing of lawsuits in a jurisdiction with no direct link to the issue or parties involved. New York, meanwhile, is trying to draw more corporate litigants into its courts, with the hope of surpassing Delaware as the leader in business litigation. The Supreme Court’s 9-0 ruling in Daimler AG v. Bauman said that a company can be sued in a state for actions that take place elsewhere only in limited circumstances — if, for instance, the company is based in the state or incorporated there. Under the proposed law, any claim against a foreign company that registers with the New York secretary of state could be filed in New York courts, regardless of where the alleged wrongdoing took place or who was harmed.

The “Furthering Asbestos Claim Transparency (FACT) Act of 2015,” a Republican-backed bill that aims to reduce fraud in asbestos lawsuits, was approved (19-9) by the House Judiciary Committee yesterday, The Hill reported today. Bankrupt manufacturers and their insurers under the Bankruptcy Code are able to create bankruptcy trusts to compensate workers and their family members who were injured by the company’s manufacturing of asbestos. With roughly 60 asbestos trust funds and nearly $40 billion in assets, lawmakers said opportunistic individuals are able to seek multiple payouts by filing conflicting claims with numerous trusts. To protect these finite trusts from paying out money for fraudulent or inflated claims, the bill would require trusts to file quarterly reports on their public bankruptcy dockets that include information on demands for payments and the basis for payments made.  Read more.

For more on litigation and litigation trusts in bankruptcy, be sure to pick up a copy of ABI’s A Practitioner's Guide to Liquidation and Litigation Trusts. 

A judge has rejected a $6.7 million bankruptcy plan by Freedom Industries, the company behind a January 2014 chemical spill in West Virginia, the Associated Press reported yesterday. Bankruptcy Judge Ronald Pearson said in his ruling yesterday that Freedom Industries and state environmental regulators haven't agreed on cleanup terms at the Charleston spill site, and ordered Freedom to comply with state cleanup orders. Freedom's plan would have offered spill victims $2.7 million. The spill contaminated 300,000 residents' tap water for days. Businesses that couldn't operate without water, including restaurants, and individuals are seeking compensation.