Pre-Bankruptcy GM Might Lose Lawsuit Shield

Pre-Bankruptcy GM Might Lose Lawsuit Shield

General Motors may no longer be protected against lawsuits predating its 2009 bankruptcy filing and subsequent financial restructuring. 

The reversal by bankruptcy judge Robert Gerber could be the latest result from the massive ignition switch recall. Six years ago, a bankruptcy judge specified that General Motors wouldn’t be subject to lawsuits over vehicles made before its government bailout, creating the “old GM” protection from post-bailout GM. Now Gerber – the same judge that declared GM’s invulnerability – is expressing doubts, saying that it might allow the American automaker to get away with alleged misconduct with the ignition switch recall.

SEE ALSO: Mary Barra Deposed in Ignition Switch Suits

The latest official death count connected to the ignition switch recall has reached 74 and affected owners who weren’t injured are suing GM, seeking compensation for their vehicles’ loss in value. If Gerber reverses his decision and rules that bankruptcy doesn’t protect GM from claims on cars made before 2009, the automaker could face as much as $10 billion in potential liability.

[Source: Bloomberg]

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