GM Asks Bankruptcy Court to Bar Most Ignition Claims

NEW YORK -- General Motors (IW 500/5) asked a U.S. bankruptcy court to bar most suits filed over its faulty ignition system, arguing that its 2009 court-approved bankruptcy reorganization shields it from liability in most cases.

In papers filed late Monday, GM said it is not seeking protection from suits over the 13 fatalities and other injuries linked to the defect.

But GM argued that under the 2009 bankruptcy agreement, which came after the government took the company over to save it from collapse, it should be shielded from economic damages due to product defects.

These would include the decline in value of a damaged vehicle, or the cost of child care or alternative transportation while the car was out of use.

GM knew of the ignition problem for more than a decade and did not disclose it, they said.

"As a result, consumers did not have an opportunity to assert or have any reason to believe that they should try to assert any objections or claims in the bankruptcy case concerning damages caused by the defect," said the complaint.

Plaintiffs attorneys noted GM faces a criminal probe by the Department of Justice into its actions. They also cited a letter from five U.S. Senators requesting the U.S. to oppose GM's efforts to avoid liability for the pre-2009 problems.

Meanwhile GM announced Tuesday a restructuring of its global engineering division into divisions overseeing product integrity and vehicle components and subsystems, appointing chiefs of both sections.

GM has said the creation of the global integrity division will bolster safety and prevent another debacle like the ignition recall.

Copyright Agence France-Presse, 2014