GM bankruptcy filing in 2009 blocks economic loss claims in ignition-switch cases, judge rules
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General Motors Co. is protected by its 2009 bankruptcy filing from being held liable for claims that arose prior to that date, a Manhattan bankruptcy judge ruled on Wednesday.
The decision in the Chapter 11 case is expected to affect primarily vehicle owners claiming economic loss due to the diminished market value after ignition-switch issues came to light, according to Reuters and the Wall Street Journal (sub. req.).
A separate compensation fund established by GM and administered by Kenneth Feinberg is addressing injury and death claims, but some personal injury cases are reportedly blocked by today’s bankruptcy ruling.
Plaintiffs lawyers had argued that GM concealed the defect; however, U.S. Bankruptcy Judge Robert Gerber said in a 134-page decision that he found no evidence of fraud on the court, the Wall Street Journal reports.
“This ruling padlocks the courthouse doors,” plaintiffs’ attorney Bob Hilliard told the newspaper.“Hundreds of victims and their families will go to bed tonight forever deprived of justice. GM, bathing in billions, may now turn its back on the dead and injured, worry free.”
A spokesman for the automaker declined to comment.
Related coverage:
ABAJournal.com: “Bankruptcy court battle looms over economic-loss claims against GM concerning ignition-switch issues”
ABAJournal.com: “Documents show GM knew of ignition-switch issue, says plaintiff’s lawyer in leading case”
See also:
ABAJournal.com: “10 years after fatal accident, conviction is reversed; GM knew its car was to blame but kept quiet”
Detroit Free Press: “Deaths tied to defective GM ignition switches rise to 84”
