General Motors Co filed a motion in a U.S. bankruptcy court to enforce a bar on lawsuits related to ignition defects in cars sold before its 2009 bankruptcy as it fights a class action lawsuit that seeks to set aside the restriction, Reuters reported today. The plaintiffs also filed a class action lawsuit yesterday, seeking an order declaring that GM cannot use the bankruptcy protection to absolve itself from liabilities. The faulty ignition switch has been linked to at least 13 deaths and the recall of 2.6 million GM vehicles. GM emerged from a government-assisted chapter 11 filing in 2009 as a different legal entity than the so-called old GM. Under those terms, the "new GM" shed liability for incidents predating its exit from bankruptcy, and any lawsuit related to pre-bankruptcy issues must be brought against what remains of old GM. "New GM's recall covenant does not create a basis for the plaintiffs to sue new GM for economic damages relating to a vehicle or part sold by old GM," the company argued in a court filing yesterday.
http://www.reuters.com/article/2014/04/22/gm-recall-lawsuit-idUSL3N0NE2…
For further analysis, make sure to attend the "Large Complex Trusts: A General Motors Case Study" panel at this week'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/