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US Bankruptcy Judge Upholds ‘Shield’ From Some Ignition Switch Suits

Just yesterday, a US Bankruptcy Judge upheld the “new” General Motors’ shield against lawsuits pertaining to the actions of “old,” pre-bankruptcy GM. This means that GM is effectively protected from dozens of lawsuits accusing the automaker of covering-up the ignition switch defect now linked to over 200 death and serious injury claims, reports Automotive News.

Those victims who have been approved through the dedicated ignition switch victim compensation fund will still receive compensation, while the majority of these dozens of suits against pre-bankruptcy GM pertained to the depreciation of vehicle value that owners faced in the wake of the ordeal.

However, some number of death and injury claimants did not accept treatment through the compensation fund, and they – along with the aforementioned plaintiffs seeking damages for vehicle depreciation – will be barred from suing the “new,” post-bankruptcy General Motors. Instead, those suits can only be leveled at the “old” GM, the shell company of bad assets that General Motors shed during its restructuring under Chapter 11 bankruptcy.

But, while “new” GM is shielded from the actions of “old” GM through this legal shield, plaintiffs still have other avenues by which to seek legal justice. Automotive News quoted U-M Business School Law Professor Erik Gordon on the matter, who said that “victims still can sue GM for its actions after the bankruptcy, including allegations that the company continued to cover up what it knew about the switches or didn’t recall cars it knew were defective.” One of the lead lawyers for the plaintiffs, Steve Berman, was pleased that suits against the “new” GM’s conduct could continue, but said that plaintiffs still plan to appeal on the ruling.

The US Bankruptcy Judge who made the ruling, Judge Robert Gerber, was also responsible for the original 2009 ruling which gave the new General Motors a shield against old GM’s actions. During a prior hearing, he expressed some doubt toward that original ruling, remarking that he had essentially given GM a “get out of jail free” card, regardless of whether there was any cover-up or willful misdoing on GM’s part.

Judge Gerber said that he will certify the case for review by the 2nd U.S. Circuit Court of Appeals.

Aaron Brzozowski is a writer and motoring enthusiast from Detroit with an affinity for '80s German steel. He is not active on the Twitter these days, but you may send him a courier pigeon.

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Comments

  1. Absolutely incredible. At what point will GM be exposed to natural law again and stop being babied?

    Natural economic law states that if money going out is more than money coming in, then your business will go tits up.

    Natural tort law says that if you knowingly build and sell trash that kills people, you will be liable.

    Reply
  2. Again prove it!

    The best law minds can not prove it so I expect you have no chance of proving it.

    That is the issue here they may have cheapened the part but there was no intent to kill anyone. Generally when you see a failure like this most times you expect the driver to be not drunk, speeding. wearing and in control as a car shutting off is not a fatal situation. Just look at the Amber Rose accident. I can provide even more if you like.

    It comes down to lawyers who are willing to take GM to court and cost them 10s of millions in legal defense fees or hope they settle for a couple million that the lawyers will take up to 3/4 of to just settle. The legal people know they have a case that many times is not winnable but they will take the case in hopes of a greenmail settlement.

    These are cases where GM screwed up and put themselves at risk. The drivers put themselves at greater risk not being in control and the lawyers laugh all the way to the bank. In the end the lawyers win and everyone else loses including us as we pay for all of this in our next purchases no matter the brand.

    You are not even good at trolling.

    Reply

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