GM Bankruptcy Judge Reconsiders Decision to Shield Automaker from Economic Damage Claims

Posted on behalf of Jeff Pitman on March 27, 2015 in Product Recalls
Updated on April 25, 2024

GM ignition switch lawyersGeneral Motors, Inc. (GM) filed for bankruptcy in 2009, subsequently receiving a bailout of $49.5 million. At the time, all economic loss claims related to vehicles manufactured prior to the bailout would be blocked, shielding New GM from the errors of Old GM. However, the same judge who granted the companys bankruptcy is reconsidering his decision.

According to a Bloomberg News report, U.S. Bankruptcy Judge Robert Gerber stated at a Feb. 17 hearing that he is trying to decide how to fix his initial ruling. Gerber says he believes shielding GM from claims related to diminished value might have allowed the company to get away with improper handling of its numerous recalls.

My task, obviously confined by the limits of law, is to do whats fair and right, Gerber said at the hearing.

While Gerber cannot reverse his ruling, he can issue a new opinion finding that the terms of the 2009 bankruptcy should not protect the company under certain circumstances. Old GM was responsible for the errors, but if New GM did not warn consumers of what its predecessor had done, it should be held liable for whatever damages result.

The latest calculations indicate that 74 people have died in a GM vehicle because of an accident linked to its faulty ignition switches. In those cases, if the ignition was jarred by a weight as insignificant as a keychain the airbags, power steering and power brakes may have become disabled, causing serious injury or death to vehicle occupants.

Gerber may take up to a month to fix his ruling, and he may decide that drivers who’ve suffered depreciated value can sue for those economic losses. These claims would be unrelated to any claims of injury or death linked to the ignition switches, and would therefore not be compensated through the fund established by GM and Kenneth Feinberg.

If you or a loved one purchased a GM vehicle that was affected by the ignition switch defect recalls, you may be entitled to file a diminished value claim.

The personal injury attorneys at Pitman, Kalkhoff, Sicula & Dentice are prepared to help you determine your legal options. Contact us today for a FREE case evaluation.

Call  414-333-3333 or fill out our online case evaluation form.

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