General Motors Co. executives huddled last week with newly hired adviser Kenneth Feinberg to consider potential ways to compensate victims of an ignition-switch defect linked to at least 13 deaths, the Wall Street Journal reported today. The answer is far from straightforward as GM was allowed to leave behind legal claims by a host of car-accident victims as part of its 2009 bankruptcy proceedings. Among those are victims who likely suffered injuries in some of the roughly 2.6 million cars the automaker has recalled because of faulty ignition switches. How GM ultimately chooses to deal with those victims or their families could create more controversy as the company, eager to move on from a $50 billion government bailout and court restructuring, reaches back into its pre-bankruptcy past to reassess the way motorists injured or killed because of vehicle defects were treated. GM has said it first discovered the ignition-switch defect nearly a decade ago but didn't launch a recall until February. Lawmakers last week peppered GM Chief Executive Mary Barra with questions about the delay, with one pointing to a "culture of coverup" at the automaker. (Subscription required.)
http://online.wsj.com/news/articles/SB100014240527023039104045794856338…
In related news, the in-house lawyers at General Motors Co. are slowly being pulled into the public questions over its ignition switch recall, Corporate Counsel reported today. House and Senate hearings revealed that GM’s legal department apparently played a role in delaying the recall. GM chief executive Mary Barra on Wednesday tried to explain to the Senate how the legal department could know about defects but failed to share that information — information that could have saved lives. Barra, at GM for 33 years, was an executive in the manufacturing and engineering division before becoming CEO in January. Sen. Claire McCaskill (D-Mo.) a former prosecutor and subcommittee chairwoman, said that GM’s lead switch engineer lied in a deposition in a suit last year about why a switch part was changed and the part number wasn’t changed, saying that he hadn’t approved it. The implication was that engineering was trying to hide the defect by replacing a faulty part and not assigning a new part number. (Subscription required.)
http://www.corpcounsel.com/id=1202649856926?kw=GM%20In-House%20Lawyers%…
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 team and the value of a freely traded unit. For more information or to register, please click here: http://www.abiworld.org/ASM14/