Judge Overturns General Motors Bankruptcy Shield, Lawsuits May Proceed1
When General Motors underwent its restructuring in 2009, it left its past in “Old GM”, or General Motors Corp. With its bailout and bankruptcy, “New GM” was created, or General Motors LLC.
Following the fallout of the ignition switch recall scandal, a U.S. judge ruled New GM was protected by lawsuits against Old GM. Now, that changes.
According to The Detroit Free Press, a federal appeals court has overturned the decision, allowing lawsuits against GM to proceed. This means New GM is responsible for Old GM’s actions, specifically, not disclosing the ignition switch fault during its restructuring, and failing to address it altogether.
“Old GM did nothing, even as it knew that the ignition switch defect impacted consumers,” the court ruled.
The panel added: “New GM essentially asks that we reward debtors who conceal claims against potential creditors. We decline to do so.”
The ruling brings hundreds of lawsuits over the ignition switch recall back to life, and also lawsuits regarding loss of value to vehicles due to the scandal.
Plaintiffs’ lawyers are already celebrating the victory for their clients.
“I was so relieved for my clients,” Texas attorney Robert Hilliard said in an interview. “For years many of the victims of the GM ignition switch have had their claims languishing in bankruptcy court. These folks will have their day in court.”
GM settled with many of those affected by the ignition switch scandal, forfeiting their right to sue the automaker. General Motors awarded nearly $600 million through a compensation fund, with each victim receiving a minimum of $1 million.
The automaker stands ready to defend itself, however, stating each victim will still have to prove their case.
“We are reviewing the ruling and its impact,” GM spokesman Jim Cain said in a statement. “Even if some claims are ultimately allowed to proceed, the plaintiffs must still prove their cases.”
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I do not minimize the tragic loss of life and health suffered by the drivers and their loved ones. Nor do I minimize the more important loss of sense of safety. Nor do I minimize the utterly disgusting attitude of the engineers, designers, executives, and others that may have had any part in producing the aforementioned losses and/or standing by silently while the losses were being incurred. Finally, none of the individuals that had a responsible part in the losses should be allowed to evade punishment of some kind, proportionate to their respective role, responsibility, and capacity in the actions that led to the incurred losses.
With that said, however, some of the responsibility for the losses still need to go to the driver. Not long ago we all heard about a person who died while relying entirely on the “skill” of his car’s autonomous driving capabilities. As absurd as this sounds to all of us, all of us are guilty to some extent. If you have a backup camera on your vehicle, and you use it instead of your mirrors and your shoulder check, you are giving technology to much power. If you expect your car to jump on the brakes while you contemplate the day you just had, you are giving technology to much power. If you are not checking all your mirrors every 7 to 10 seconds to make sure you know what is around you, you are giving technology to much power. If you expect your car to let you know when you are changing lanes, you are giving technology to much power. If you reach for your GPS before having a pretty decent idea of where you are going, you are giving technology to much power.
The driver of the vehicle should be trained well enough that they can handle their vehicle if the operational systems stop working. Millions of people drove for millions of miles before power steering, power braking, and airbags came into existence.
It is truly heart-wrenching when a life is taken. Death is never late or behind schedule. We must continue to develop products that are safe, and products that are safe to use. Safety is a bar that must constantly rise, and we all need to be actively involved in raising it. Recently, a woman who lost two daughters to the legal responsibility of sellers of recalled vehicles was able to put her hand prints on the rising bar of safety. When we learn of ways to make things safe and safer, we must become involved.
Still, the ultimate responsibility of safety behind the wheel belongs to the individual holding the steering wheel.