General Motors may be responsible for actions of “Old GM”, following a recent court appeal decision, but it will not be responsible for loss of value in its vehicles.
According to Reuters, U.S. District Judge Jesse Furman in Manhattan federal court dismissed plaintiffs’ calls to hold GM responsible for loss of value in vehicles following the massive recalls surrounding a faulty ignition switch.
Per the report, recognizing the “brand devaluation theory” could lead to automakers being responsible for numerous areas should they be hit with a scandal. Furman called the notion “unprecedented and unsound.”
However, Furman did rule plaintiffs may pursue damages involving out-of-pocket expenses involved with the recalls.
GM supported the decision, with spokesman Jim Cain stating, “The court made it clear the plaintiffs overreached in many aspects of their complaint, and the ruling significantly curtails the scope of their potential recovery.”