General Motors must be reeling with a sickening sense of déjà vu. The Detroit Free Press reports that the company is back in bankruptcy court, facing the same judge that oversaw its bankruptcy proceedings in 2009.
The company is in court to determine whether it has a “financial shield” from lawsuits and pending litigation levied at vehicles, mostly ignition-switch-recall cases, prior to its official bankruptcy in mid-2009.
If GM wins the case, it will only have to face lawsuits dealing with “new GM” vehicles– any lawsuits aimed at “old GM” will no longer be the problem of “New GM”. To be clear, the company will still have to face all of the lawsuits post-bailout. This legal battle will only determine whether the company will be liable for “old GM” vehicles and perceived wrongdoing.
If the plaintiffs win the case, “new GM” will be considered liable for the actions of “old GM” and will be open to paying billions more in potential lawsuits and legal fees.
The plaintiffs will be arguing on behalf of thousands of GM customers who own vehicles that were recalled last year for a wide variety of defects and malfunctions, including the all-encompassing ignition switch recall. Those customers have sued GM, claiming they lost value on their vehicles. Some of those customers are also suing for personal injury and even deaths in relation to the defects.
“Judge Gerber must determine whether GM had sufficient knowledge of any defects such as the defective ignition switches to warrant disclosure to him back in 2009 before old GM was given the shield and allowed to go broke,” noted the report.
The Judge is not expected to levy a final decision for weeks. Stay tuned to see how it all unfolds.