"New" GM Will Back Bad-Product Claims
June 29, 2009
Hoping to mitigate legal speed bumps that might slow its sprint through Chapter 11 bankruptcy, the "new" General Motors Corp. will take responsibility for product-liability claims, even for vehicles produced and sold by the company prior to bankruptcy.
The Washington Post
reported the new GM will assume responsibility for all future product-liability claims, a point that raised the ire of some consumer groups and state Attorney's General when it became known part of the company's restructuring blueprint included a plan to shield the new company from any exposure to any liability claims on vehicles the company produced up to the point of its bankruptcy. The objectors said the legal maneuver to shield the restructured GM from such liens was improper.
The Chapter 11 bankruptcy GM is undergoing is structured to divide the company's valuable assets from its debts and other liabilities, which will be left with the "old" GM. Those with monetary or other legal claims against GM will have to seek recovery from the old GM, which makes the prospect of winning compensation a problematic and likely lengthy prospect.
With a key hearing scheduled tomorrow on the sale of GM's valuable assets to the new, restructured GM, the company announced in a court filing it would amend the plan to make the new GM responsible for product-liability claims going forward. Those with existing claims will have to pursue compensation from the old GM, however.
It has been reported there currently are more than 300 individuals with personal-injury claims involving GM products.
Posted by Bill Visnic at 6:38 AM under Companies , GM , News | Comments (0) | digg this | Seed Newsvine
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