GM to Seek Court Protection from Ignition Lawsuits

GM to Seek Court Protection from Ignition Lawsuits

GM plans to ask the New York court which oversaw its 2009 bankruptcy to determine whether it can be sued for liabilities arising from the company's operations pre-bankruptcy. The company's filing said that the bankruptcy court's original restructuring plan made clear that liabilities like the ignition-switch problem remain with Old GM and that third parties cannot sue New GM for them.

NEW YORK - General Motors (IW 500/5) plans to ask a bankruptcy court to rule that it is protected from lawsuits arising from faulty ignitions tied to 13 deaths and numerous crashes.

In a federal court filing in Corpus Christi, Texas, late Tuesday, GM said it plans to ask the New York court which oversaw its 2009 bankruptcy to determine whether it can be sued for liabilities arising from the company's operations pre-bankruptcy.

The bankruptcy reorganization, which came after the U.S. government rescued the largest U.S. automaker the previous year, split the company into "Old GM" and "New GM."

The company's filing Tuesday said that the bankruptcy court's original restructuring plan made clear that liabilities like the ignition-switch problem remain with Old GM and that third parties cannot sue New GM for them.

Ignition-switch lawsuits like that filed in the Corpus Christi court relate "to a vehicle designed, manufactured, originally sold and advertised by Old GM; a potentially defective component part allegedly existing in an automobile sold in 2006, before New GM even existed," the company argued.

GM said it will ask the bankruptcy court for a definitive ruling on the liability of New GM in all ignition cases.

The 2009 bankruptcy decision "has already expressly enjoined third parties... from asserting claims against New GM that remained with Old GM," the company said.

GM said it wants the Corpus Christi trial halted at any rate so it can consolidate into one all of the lawsuits arising from the faulty ignitions, to be heard by a California judge.

It said it expects the bankruptcy court judge to rule it is protected from the suits.

But even if the court rules that New GM is partly liable, its ruling will "inevitably narrow and fundamentally alter" the nature of the cases, GM said, more reason to halt the Texas proceedings.

Copyright Agence France-Presse, 2014

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