When General Motors entered Chapter 11 reorganization in 2009, ‘New GM’ was created, relieving the company of the liabilities of ‘Old GM’. As a result, New GM may be immune from plaintiffs seeking damages or other lawsuits, including in the bizarre case of a former GM security guard who served 20 years in an Ohio prison for rape, detailed in a recent report from Reuters.
Roger Dean Gillispie formerly served as a GM security guard at one of its facilities in Dayton, Ohio. In 1988, police received three reports of rape, with Gillispie being named as the prime suspect in all three by his boss at the time. The boss withheld evidence and testified against Gillispie, all because of an apparent grudge against him.
A jury later convicted Gillispie of rape, kidnapping, gross sexual imposition and aggravated robbery, despite him maintaining his innocence throughout the ordeal. Ohio federal and state courts have released Gillispie after a review of his case, saying he does not match the victims’ description of the suspect and that there was a lack of physical evidence. Now Gillispie is looking to sue GM for allegedly helping to set him up, but he must wait on a U.S. Bankruptcy Court ruling to get permission to do so.
The Bankruptcy Court will decide if New GM can be held liable for Gillespie’s case. GM spokesman Jim Cain said “we do not believe New GM is in any way responsible” for Gillespie’s case because if the claims are from pre-2009, they cannot sue New GM. Gillespie argues that he could not have known about key facts in his case before the GM bankruptcy and should be able to sue the new entity.
Complicating this already strange turn of events is a group of Wall Street players with hedge funds that have claims on Old GM’s assets. This group includes major investment firms such as Davidson Kempner Capital Management, Angelo Gordon & Co and Empyrean Capital Partner, who all bought rights to the Old GM trust, which is now worth about $1.2 billion. They are worried that if Gillispie and other plaintiffs seeking damages for lost value on cars affected by the automaker’s ignition switch recall aren’t allowed to sue New GM they will sue Old GM, which would cut into their Old GM assets.
The administration company which represents the interests of Old GM stockholders, Wilmington Trust Co., supported Gillispie in his appeal by saying his “due process rights would be violated,” if he wasn’t allowed to sue New GM. Other Old GM stakeholders also backed up Wilmington’s stance on the matter soon after.
Bankruptcy Judge Robert Gerber must now decide if Gillispie, along with the other plaintiffs seeking retribution for the lost value of their vehicle, can sue New GM. He is expected to make a ruling on the matter in a few months. In the meantime, Gillispie has launched a lawsuit against the town and county that investigated him, police officers and investigators involved in his case and his former GM supervisor and co-workers.