Bankruptcy Affords No Protection in GM Ignition Switch Lawsuits

GMAn appeals court ruled against GM in the car manufacturer’s attempt to avoid liability in GM ignition switch lawsuits. It may appear odd that GM would seek to be released from such cases where their liability is so clear. However, this all relates to their 2009 bankruptcy filing.

Bankruptcy

Out of GM’s bankruptcy process came a new entity, “New GM”. Claims filed against GM before bankruptcy were void in regards to New GM. This meant that New GM could avoid liability in ignition switch lawsuits targeting their pre-bankruptcy entity, “Old GM”.

However, the appeals court ruling essentially said, “Not so fast.

Due Process of Law

GM failed to mention defective ignition switches when filing for bankruptcy. This omission led the 2nd US Circuit Court of Appeals to conclude that GM deprived consumers of due process of law. As a result, consumers’ claims stand against New GM.

No Protection in Bankruptcy

The appeals court judges stated that “[i]f a debtor does not reveal claims that it is aware of, then bankruptcy law cannot protect it.”

GM now faces responsibility in 1000 ignition switch lawsuits that involve death or injury.

File a GM Ignition Switch Lawsuit

Ask an attorney at Carey Danis & Lowe about your case. During a free case evaluation, we can help you determine if filing a GM lawsuit is right for you and your family. Call 800.721.2519, or complete our confidential online form.

References: Consumer protection
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