Not long ago, General Motors sought protection in bankruptcy court against lawsuits based on “purely economic damages.” Today, GM is seeking protection in the bankruptcy court from lawsuits stemming from accidents happening before 2009, or before General Motors declared bankruptcy.
Once again, the murky division between “Old GM” and “New GM” are referenced, though plaintiffs argue that GM shouldn’t be allowed blanket immunity because of procedural problems in GM’s exit in 2009. Though if that’s not enough to sway Bankruptcy Judge Robert Gerber, plaintiff lawyers will also argue that GM committed bankruptcy fraud by not disclosing the ignition defects, according to a developing Detroit News report.
One suggestion was to tap the funds left behind by Motors Liquidation Corp. (“Old GM”), locked up in a trust, while another was for “New GM” to set up a compensation trust, whether the bankruptcy judge rules the company liable or not. We will continue to update you all with updates as the story develops.