Make us your home page
Instagram

GM says bankruptcy should shield it from deadly switch legal claims

GM CEO Mary Barra, shown with the Chevrolet Trax at the New York International Auto Show last week, is overseeing a strategy against legal claims by saying the problems that led to the recall of 2.6 million vehicles was under the “Old GM.”

Associated Press

GM CEO Mary Barra, shown with the Chevrolet Trax at the New York International Auto Show last week, is overseeing a strategy against legal claims by saying the problems that led to the recall of 2.6 million vehicles was under the “Old GM.”

DETROIT — General Motors and a battalion of trial lawyers are preparing for an epic court fight over whether GM is liable for the sins of its corporate past.

The company is asking a U.S. bankruptcy court to shield it from legal claims for actions that took place before the company's 2009 bankruptcy. But lawyers who are suing GM say it shouldn't get the usual benefits of bankruptcy protection because it concealed a deadly ignition switch problem, which has been linked to 13 deaths, when the court was making bankruptcy decisions.

Late Monday, GM filed a motion in New York asking the court to bar claims that GM small cars lost value because of the ignition switch problem, which has led to the recall of 2.6 million older small cars worldwide. The company has admitted knowing about the problem for more than a decade, yet it failed to start recalling the cars until February to replace the defective switches.

The Detroit automaker contends in its motion that under the bankruptcy, which ended on July 10, 2009, assets and liabilities of the old General Motors Inc. were split in two, with good assets sold under court order to "New GM" and bad ones and most liabilities going to the "Old GM," which was left behind. The recalled cars were made and sold by the old company. The new GM, the motion asserts, took on only these categories of liabilities after bankruptcy: those for post-bankruptcy crashes involving cars made by "Old GM" that caused injuries, deaths or property damage; and warranty and lemon law claims.

But Robert Hilliard, a lawyer who has several wrongful-death lawsuits pending against GM, says the motion is an implied threat to those who have filed such lawsuits against GM: Either settle or risk getting nothing because the company will argue that claims should go against the Old GM, which has few assets.

After GM filed its motion, a group of trial lawyers concerned that the court will bar them from seeking damages quickly filed a class-action lawsuit with the bankruptcy court. The lawsuit says that since GM knew about the defective ignition switches before its 2009 bankruptcy, it should have informed the court of its potential liability. The lawsuit also says GM can't use the bankruptcy as a shield because the same employees worked for the company both before and after the bankruptcy.

GM hires investigators

General Motors is adding 35 product safety investigators as part of a larger restructuring of its engineering operations in response to a massive safety recall. GM said Tuesday that the new investigators will more than double the size of its current team, to 55. The company is also dividing its global engineering operations and placing a greater emphasis on whole vehicles, and their safety, instead of on individual parts.

GM says bankruptcy should shield it from deadly switch legal claims 04/22/14 [Last modified: Tuesday, April 22, 2014 10:05pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Last orca calf born in captivity at a SeaWorld park dies

    Tourism

    ORLANDO — The last killer whale born in captivity under SeaWorld's former orca-breeding program died Monday at the company's San Antonio, Texas, park, SeaWorld said.

    Thet orca Takara helps guide her newborn, Kyara, to the water's surface at SeaWorld San Antonio in San Antonio, Texas, in April. Kyara was the final killer whale born under SeaWorld's former orca-breeding program. The Orlando-based company says 3-month-old Kyara died Monday. [Chris Gotshall/SeaWorld Parks & Entertainment via AP]
  2. Miami woman, 74, admits to voter fraud. Does jail await, or will she go free?

    State Roundup

    MIAMI — An 74-year-old woman pleaded guilty Monday to filling out other people's mail-in ballots while working at Miami-Dade's elections department.

    Gladys Coego
  3. Bigger ships carry Georgia ports to record cargo volumes

    Economic Development

    SAVANNAH, Ga. — Bigger ships arriving through an expanded Panama Canal pushed cargo volumes at Georgia's seaports to record levels in fiscal 2017, the Georgia Ports Authority announced Monday.

    The Port of Savannah moved a record 3.85 million container units in fiscal 2017, the state said, benefiting from the larger ships that can now pass through an expanded Panama Canal.
  4. Dragon ride in Harry Potter section of Universal closing for new themed ride

    Florida

    Universal Orlando announced Monday that it will close Dragon Challenge for a new "highly themed" Harry Potter ride to open in 2019 — sending wizard fans into a guessing game with hopes for a Floo Powder Network or the maze from the Triwizard Tournament.

    Universal Orlando announced Monday that it will close Dragon Challenge on Sept. 5 for a new "highly themed" Harry Potter ride to open in 2019. The ride, originally the Dueling Dragons roller coaster, was renamed and incorporated into the Wizarding World of Harry Potter when the hugely popular area opened in 2010.
  5. Would you let your company implant a chip in you?

    Working Life

    Would you ask an employee to get a chip implanted in her hand? Sounds invasive and intrusive. But come Aug. 1, one company in Wisconsin will be giving it a try.

    Three Square Market - a developer of software used in vending machines - is offering all of its employees the option to get a microchip implanted between the thumb and forefinger. [Photo from video]