Thursday, April 16, 2015

Judge upholds GM’s bankruptcy shield.

In continuing coverage of GM’s faulty ignition switches, the CBS Evening News (4/15, story 9, 0:25, Pelly, 5.08M) reports in its nightly broadcast that a Federal judge ruled the company’s bankruptcy shield established in 2009 prevents the company from being held liable in “death and injury lawsuits tied to defective ignition switches.” CBS notes that the company has tied 84 deaths to the defect.
        The New York (NY) Times (4/16, Stout, Ivory, Subscription Publication, 9.97M) reports that Judge Robert E. Gerber ruled that the liability shield should remain “even though the company has acknowledged that many employees knew about the defective switch at the time but failed to alert owners of the cars that they might have a potential claim against the company.” The Times reports that the ruling “shuts down not only lawsuits stemming from accidents that took place before July 10, 2009, but also most of the suits seeking economic damages for the loss in value of the defective cars.” However, the Times notes that lawsuits related to accidents occurring after the date would be allowed to continue. The Times describes GM’s reactions as “muted and technical,” while families of those affected by the defect were “more emotional.”
        The Los Angeles (CA) Times (4/16, Hirsch, Raab, 3.49M) quotes Bob Hilliard, a Texas attorney representing ignition-switch victims and their families, claiming the ruling “padlocks the courthouse doors” and “Hundreds of victims and their families will go to bed tonight forever deprived of justice. GM, bathing in billions, may now turn its back on the dead and injured, worry free.” Steve Berman, managing partner of Hagens Berman and co-lead counsel representing plaintiffs in nationwide litigation against GM, said he plans to appeal because “It cannot be the law that Old GM could hide the defects, and subsequently use the bankruptcy court as a shield.”
        Reuters (4/15) reports that plaintiffs arguing the economic loss of value lawsuits against the company could proceed if they are based on the actions of New GM, though plaintiffs will continue to challenge the ruling.
        Bloomberg News (4/15, Sandler, 2.94M) reports that Judge Gerber ruled on Wednesday that General Motors Co. may invoke “a bankruptcy shield” against class action lawsuits related to the company’s faulty ignition switch recalls and the “lost value for 27 million recalled cars,” protecting GM from $10 billion in lawsuit claims. However, according to Bloomberg, the Judge also stated that “car owners can still sue over its failure to warn of the defects.”

        USA Today (4/15, Woodyard, Today, 4.95M), the Wall Street Journal (4/16, Bennett, Subscription Publication, 5.67M) and Forbes (4/15, 6.54M) report on this story. 

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