According to the New York Times (click here), General Motors and the Obama administration have reached a deal whereby GM will assume responsibility for product liability claims involving its vehicles after the auto maker emerges from bankruptcy. And as reported by the Times, this deal will cover future claims involving vehicles made by the pre-bankruptcy GM. Consumers with past claims will have to go after the “old” GM. And what that means, as pointed out by the Washington Post (click here), is that those consumers are likely to recover little if anything.
In other words, normally when a company emerges “new” from bankruptcy, it sheds any liability that the “old” company had for product liability claims (or any claims). The tort victims in those cases are forced to get in line with other unsecured or judgment creditors in order to go after assets the “old” company might have left. But because of this deal that’s now not the case. Now, ostensibly, those product liability claims in the future will be allowed to proceed in state court against the “new” company. But those with pending claims or past are left out of the deal. According to the Times, this deal also wraps up numerous issues that GM had with state attorneys general and dealerships.
The hearing on the deal is set for Tuesday in federal bancruptcy court in New York.
Tags: San Francisco Injury Attorney Discusses Product liability claims
