The very same judge who set forth bankruptcy rules for General Motors in 2009 continues to steer the course, setting the rules for impending fights regarding the ignition switch recall.
U.S. Bankruptcy Judge Robert Gerber, who oversaw General Motors’ 2009 bankruptcy and reorganization, on Friday ordered both plaintiffs and GM to file briefs on whether the automaker broke rules by not treating customers with defective ignition switches as creditors when the automaker sought court protection. Both sides must also present arguments whether GM witheld evidence of the defective switch.
Automotive News reports plenty of lawsuits have followed since the recall, but the courts have told most of them that lawsuits can only move forward once it is determined whether General Motors acted fraudulently in hiding its liabilities during its reorganization. Both sides are due back in court on July 2nd.
GM says it accepts responsibility for all injury and death claims, but it is relying on Gerber for protection from the economic-loss claims because under bankruptcy laws it was shielded from the liabilities of the predecessor company. “As General Motors’ court filings detail at length, the bankruptcy court’s 2009 orders are binding on the class-action plaintiffs and prohibit most or all of the claims asserted in the pending ignition switch cases,” says GM spokesman Kevin Kelly.
Plaintiffs must convince Gerber that the protection General Motors has for being an reorganized legal entity should not be allowed due to GM misleading the court five years ago. “GM knew there was a problem and didn’t tell anyone about it, so nobody could file a claim,” says attorney Sander Esserman, who is one of several lawyers representing plaintiffs. “Now they’re saying we’re without rights and remedies.”
Adds law professor Carl Tobias, “Those are the best arguments they can make.”