U.S. Bankruptcy Judge Robert Gerber on Wednesday ruled that General Motors (GM) is protected from liability for products produced by “Old GM” under its 2009 bankruptcy filing. Judge Gerber said the sale order and injunction separated assets of Old GM and prevents plaintiffs from suing “New GM” for pre-bankruptcy actions. The ruling means plaintiffs who were injured or killed as a result of GM’s defective ignition switch in vehicles manufactured prior to the bankruptcy filing involving accidents that occurred prior to the date of the bankruptcy order will be unable to sue the automaker for compensation. The ruling also affects plaintiffs who are part of the class action lawsuit seeking compensation for economic losses. It appears those pre-bankruptcy claims will survive.
“This order doesn’t affect any of our current wrongful death or personal injury clients since those motor vehicle accidents were all post-bankruptcy,” Beasley Allen Principal & Founder Jere Beasley said. “But it does hurt hundreds of families who lost loved ones in accidents that occurred before the date of the bankruptcy order in June 2009. It is unconscionable that GM would be relieved of responsibility for taking care of these folks, when it is evident that the automaker knew for more than 10 years – well before they filed for bankruptcy – that the ignition switch was defective. GM engaged in a cover-up of massive proportions. I really hope to see this ruling appealed by the MDL lawyers and reversed. GM needs to be held totally responsible for its wrongdoing.”
GM’s defective ignition switch has prompted the recall of more than 17 million vehicles to date. The ignition switch problem can leave a vehicle without power and the driver unable to control the vehicle in sudden and dangerous situations. Investigations have revealed GM knew about the ignition switch defect for 11 years before disclosing it to safety regulators and the public and announced its first recall in February 2014. Last May, the National Highway Safety Administration (NHTSA) hit GM with a $35 million fine for neglecting to follow federal rules mandating automakers notify regulators of safety defects within five business days of discovering them, issue a recall, and develop a repair.