General Motors could be exposed to nearly 60 class-action lawsuits related to its ignition-switch crisis affecting 2.6 million vehicles worldwide and linked to at least 13 deaths.
US bankruptcy Judge Robert Gerber in New York ruled Friday that the 2009 Chapter 11 bankruptcy that allowed the Detroit automaker to restructure its operations does not necessarily shield the company from lawsuits seeking as much as $10 billion in damages connected to incidents dating back to the old company.
Before rendering a final decision, Judge Gerber urged settlement talks between GM and the plaintiffs, rather than continued litigation.
Although General Motors has apologized for errors that delayed action to prevent the defective part from being installed in cars for nearly 10 years, it has not admitted liability. Instead, the company argues that the terms of its bankruptcy protect it from any product liability claims for crashes, or other malfunctions, dating before July 10, 2009, when the “new GM” emerged from bankruptcy.
On Friday, GM went before Gerber to ask him to reaffirm the terms of the 2009 bankruptcy, given that he was the presiding judge at that time.
“New GM did not assume the liabilities of Old GM,” GM said in its court filing. The old company was formally named Motors Liquidation Corp. and was dissolved in December 2011, after operating as a trust to settle old claims.
Before coming to a decision, Gerber urged the company to consider settling rather than moving forward with what he predicted would be a “monstrous battle” in court.
SOURCE: Mark Guarino
The Christian Science Monitor