A federal judge denied a motion by General Motors Corp. (GM) to dismiss a lawsuit that claims company officials who oversee employees' retirement funds failed to act responsibly, attorneys for the plaintiffs said Friday.
The suit, filed in U.S. District Court for Michigan, claims that GM and the managers of its two retirement funds ignored the company's financial issues, causing employee investors to suffer huge losses.
The case involves two GM plans, a personal savings plan for hourly employees, and a stock-purchase program for salaried employees, both of which, plaintiffs said, hold large amounts of GM stock.
Plaintiffs' attorneys said Judge Nancy Edmonds stated in her ruling that GM had a duty to convey to its retirement plan members complete and accurate information about its true financial health, something the suit claims the automaker failed to do.
The suit also claims that GM put its own interests above those of its employees by continuing to offer its stock as an investment option when, the plaintiffs say, it was clearly not a sound investment.