General Motors Co.’s request for court protection from car-owner suits seeking compensation for recalled autos with defective ignition switches was attacked as legally “unsupportable,” Bloomberg News reported yesterday. Car owners challenged GM’s position that it may compensate accident victims but not them, claiming in a court filing yesterday that GM committed fraud by not revealing the defects, allegedly known since 2001, or listing either group as creditors in its 2009 bankruptcy. In the reorganization, Bankruptcy Judge Robert Gerber freed GM from most liabilities, leaving intact some warranty obligations and accident responsibility. Bankruptcy lawyers said that it will be hard for car owners to reopen the case, which is good news for GM. Fitch Ratings said last month the automaker faced more risk from recall suits than the cost of fixing millions of cars or fines stemming from a federal regulatory probe.
http://www.bloomberg.com/news/print/2014-04-23/gm-car-owners-attack-aut…
For further analysis, make sure to attend the "Large Complex Trusts: A General Motors Case Study" panel tomorrow 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/