The owners of General Motors cars which they say have lost value as a result of a faulty ignition switch are arguing that it’s wrong for the automaker to shield themselves with bankruptcy laws, Automotive News reports. The complainants are looking to be reimbursed for lost value of their cars, however Judge Gerber ruled during bankruptcy proceedings in 2009 that “New GM” is not responsible for wrongdoings committed by “Old GM.”
The vehicle owners say GM knew the cars were defective and allowed them to be left and the market and sold anyways. Because the owners allegedly purchased the cars when GM knew they were faulty, they are looking to be reimbursed for the value of the cars. Gerber ruled GM was free from responsibility of the cars made by the old company, which was disbanded following its 2009 bankruptcy. The ruling may protect GM from multiple class action lawsuits.
“Think how extreme it is,” Steve Berman, a lawyer in the class action, told AN. “New GM sells a car in, let’s say 2011, with a known bad part. Even if made by old GM, it’s new GM lying to consumers at this point, and we don’t believe they can take refuge behind the bankruptcy.”
Judge Gerber said he will set a hearing date for late January in regards to whether or not the plaintiffs are allowed to sue GM, but it could take more than a month to reach a decision. GM argues the cars have not lost value and that it is not responsible for pre-2009 cars sold after 2009. Many of the plaintiffs believe it’s GM’s fault the faulty models were sold by dealers or third-parties after 2009, Gerber said.
In total, about 130 lawsuits pertaining to lost value of cars have been combined into two class action cases in Manhattan federal court. If Gerber decides plaintiffs have the legal right to sue GM, the cases will be held by U.S. District Judge Jesse Furman. AN says a smaller case is for cars bought before the bankruptcy, while a larger $10 billion suit is for vehicles purchase post-2009.