While hundreds of thousands of customers are saying that an ignition-switch flaw in their General Motors vehicles depressed their value and that the company should make up the difference, GM will argue in court filings later today that it should not, Bloomberg News reported today. More than $2 billion hangs in the balance for GM as Bankruptcy Judge Robert Gerber’s ruling on the issue, according to a Bloomberg News calculation. It’s increasingly likely that Gerber may say customers such as Jesse Salazar III should be given a shot at collecting, said Chip Bowles, a bankruptcy lawyer at Bingham Greenebaum Doll LLP. “He could easily rule that,” said Bowles, who isn’t involved in the case. At issue is whether the biggest U.S. automaker bears liability related to vehicles it built and sold before its July 2009 bankruptcy. The matter came to a head after GM recalled 2.2 million U.S. vehicles with an ignition-switch flaw that has been linked to at least 30 deaths. GM has said it’s setting aside as much as $600 million to compensate people who were injured or lost loved ones in those vehicles, including pre-bankruptcy models, that inadvertently lost power. GM says that it isn’t obligated, however, to pay economic damages to people who claim those same pre-bankruptcy cars are worth less because of the flaw.
