General Motors to Seek Court Protection from Pre-Bankruptcy Liabilities


General MotorsIn a normal scenario, General Motors’ recent vehicle recall stemming from faulty ignition switches would mean that individuals who have experienced injury or wrongful death could receive compensation for their losses.

However, General Motors (GM) filed for bankruptcy in 2009, meaning the company will be protected from lawsuits stemming from any injuries or wrongful deaths that took place before the bankruptcy.

On Wednesday, April 16, the Wall Street Journal reported that GM, the nation’s largest producer of automobiles, plans to ask a U.S. bankruptcy judge this month to invalidate claims filed on pre-bankruptcy ignition switch-related injuries.

GM has recalled an estimated 2.6 million vehicles worldwide due to faulty ignition switches, according to the Wall Street Journal. Thirteen deaths have so far been linked to the ignition switch problem, with at least nine of these taking place before GM’s bankruptcy petition, federal records show. No figures yet exist for the number of individuals who have been injured.

GM’s attempts to seek bankruptcy protection come despite requests from lawmakers, victims and victims’ families alike to not do so.

“Whatever GM’s lawyers may argue, the judges in these cases should deny GM this shield,” Sen. Richard Blumenthal (D., Conn.) said in an April 16 statement. “Several of my colleagues and I have called on the Department of Justice to insist that the company establish a compensation fund as part of any settlement of a criminal investigation.”

“An individual or consumer thinking about filing bankruptcy may mistakenly equate their situation to a corporate situation like GM, and try to draw their own conclusion as to what is available,” explains Charles Huber, Attorney at The Law Offices of Charles H. Huber. “An individual with a problem should be encouraged to seek out a qualified bankruptcy lawyer.”

It is yet to be seen if bankruptcy lawyers will grant GM the freedom from its liabilities it seeks. If GM manages to avoid being held responsible for pre-2009 injuries and deaths, it will deny countless individuals of rightful legal compensation.

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