A New York judge of the U.S. Bankruptcy Court threw out a GM ignition switch settlement agreement that would have required the American automotive giant to pay $1 billion to compensate car owners over its faulty ignition switches.

The GM ignition switch settlement agreement was reached in principle last August between attorneys representing GM car owners and those representing the trust that now holds GM’s assets and liabilities from before its 2009 restructuring. Later, attorneys for the trust later backed out of the agreement, without having signed it.

According to the bankruptcy judge, the agreement is invalid without attorneys’ signatures.

The GM liabilities covered by the settlement are from the company’s faulty ignition switches that have led to the recall of 2.6 million vehicles. The defective ignition switches have been connected to 124 deaths.

The GM ignition switch settlement agreement calls for GM to accept between 400 and 500 personal injury and wrongful death claims, in addition to accepting $10 billion in claims alleging economic loss.

The lawyers for the car owners and attorneys of the trust agreed to the deal, but both sides never signed the GM ignition switch settlement agreement, as the trust’s attorneys walked away from the deal several days later. The trust had accepted a proposal brought forth by GM to help pay for defenses against claims by the car owners.

The New York judge criticized the lawyers of the trust, declaring that their walking away from the deal as an act of bad faith and dishonesty.

He questioned how this came about, adding that it is in GM’s best interest to disband any deal requiring it to cough up more money.

According to a Reuters article, the judge commented, “I have trouble saying it passes the smell test,” referring to the trust and GM’s two-hour August meeting that ended with a dropped GM ignition switch settlement agreement.

A lawyer for GM explained that “[s]ometimes people simply get cold feet, even when they get married,” he said, “and the same applies to settlements, your honor.”

Steve Berman, an attorney representing the car owners, said he saw benefits for his clients in the judge’s ruling, despite the loss of the settlement.

The New York judge “clearly thought the trustee and (law firm) Gibson Dunn acted in bad faith and we see therefore they both must be removed as trustee,” Berman said. He added that car owners would start settlement talks over with a new trustee.

The agreement would have resolved claims from before GM’s 2009 bankruptcy. It would not have affected 2.4 million pending claims that pertain to the company’s vehicles sold after the company’s 2009 bankruptcy announcement.

GM has already been required to pay $900 million dollars to the U.S. Department of Justice over criminal probe allegations, in addition to paying a $2.5 settlement pertaining to claims over faulty ignition switches.

So far, GM has paid around $2.5 billion over claims related to its defective ignition switch.

GM attempted to set up a legal shield to evade consumer claims from prior to its 2009 bankruptcy sale. The legal shield, however, was later undone by a federal appeals court. This opened and allowed consumers to submit additional claims. The company relinquished the shield for victims of the defective ignition switch for which they eventually paid out roughly $600 million.