Talks Collapse Between Hedge Funds, “Old GM”

The trust that is liquidating the assets General Motors Co. cast off in bankruptcy has broken off settlement discussions with a group of hedge funds that are seeking a big payout for notes issued by GM's Canadian unit.

Motors Liquidation Co. GUC Trust sued four hedge funds in bankruptcy court a year ago, according to Bloomberg News. The lawsuit alleges that the investors, who bought the notes just before GM filed for Chapter 11 in mid-2009, are seeking more than three times what they are owed.

The trustee is seeking to have the hedge funds' claims dismissed or reduced.