GM Wins Ignition-Switch Lawsuit Shield, Hides Behind Old GM
As expected, it has happened. A U.S. Bankruptcy Judge has ruled the “new” General Motors isn’t liable for some of the ignition-switch defects that occurred prior to the bankruptcy. If you are following along that responsibility falls on the “old” General Motors. A shell company comprised of bad assets.
The ruling is quite simply a major boost to General Motors and terrible for the plaintiffs. However, all does not seem lost for those plaintiffs, as the U.S. Bankruptcy Judge Robert Gerber said those car owners can still sue over failure to warn of the defects.
Suing over the failure to notify is an interesting tactic and is pretty cool the Judge vocalized his opinion on it. It should also ring a bell, this is the same logic that the NHTSA used to fine Toyota $16 Million back in 2010 over the unintended acceleration case.
While the failure to notify is an opening, plantiffs aren’t happy with Gerber’s ruling and are planning an appeal. Understandably, they realize the “pot of gold” just got taken away from them and they will likely get far less money from lawsuits.
General Motors was quite pleased with the decision.
“Judge Gerber properly concluded that claims based on Old GM’s conduct are barred, and that the Sale Order and Injunction will be enforced for such purposes,” GM said in a statement. “With respect to any claims that were not expressly barred, Judge Gerber’s decision doesn’t establish any liability against GM and the plaintiffs still must prove the merits of their claims in the [multi-district litigation] proceeding.”
Overall, nearly 200 lawsuits have been brought against GM and these suits have been consolidated in New York federal court. The Plantiffs are seeking an estimated $7 billion to $10 billion in lost vehicle value.
This case is far from being decided and we will keep track of the news as it unfolds.
Find more details on the AutoNews.com story.
Filed Under: Auto News