General Motors Co.’s bid to freeze a lawsuit over faulty ignition switches may compromise public safety, plaintiffs told a judge in California, calling the automaker’s claim that its 2009 bankruptcy shielded it from the old GM’s liabilities “irrelevant” and a “red herring,” Bloomberg News reported on Friday. GM recently defeated a consumer effort to have a court order the company to tell owners of recalled vehicles to stop driving their cars until the defect is fixed. A federal judge in Corpus Christi, Texas, said that U.S. regulators are better situated than courts to manage recall terms. The Detroit-based company has asked federal judges in California and Texas to delay litigation over the defects in cars it recalled until a bankruptcy judge in New York rules on whether some claims for compensation can be brought without violating a court order in its 2009 reorganization. The California plaintiffs said that they want to seek information from GM so they can decide whether they should ask the judge to tell GM to disclose more facts about its cars and expand its recall, perhaps also grounding the defective vehicles.
For further analysis, make sure to attend the "Large Complex Trusts: A General Motors Case Study" panel at ABI's Annual Spring Meeting. This panel will discuss the General Motors bankruptcy case with an in-depth discussion about the issuance of public units in a major bankruptcy. The session will also include the challenges addressed by the trust such as liability claims. For more information or to register, please click here: http://www.abiworld.org/ASM14/