Sen. Richard Blumenthal (D-Conn.) said yesterday that bankruptcy judges should deny General Motors protection from liability claims tied to the safety recall of 2.6 million cars, the Detroit Free Press reported today. Blumenthal was responding to reports that GM plans to ask a bankruptcy judge for protection from claims arising from the defect. In a legal filing last week, the company said that it was afforded that protection as part of its 2009 bankruptcy reorganization and would ask a judge in New York soon to reaffirm that, an action which could result in the dismissal of class-action lawsuits around the country. Blumenthal, who was Connecticut’s attorney general in 2009, was a critic of providing GM the bankruptcy protection. Yesterday he reiterated his call to force GM to establish a fund to compensate people injured or families who lost relatives in crashes tied to the defect.
http://www.freep.com/article/20140416/BUSINESS01/304160155/sen-richard-…
In related news, General Motors Co.’s move to freeze ignition-defect lawsuits in California and Texas has solid legal precedent behind it and could help slash customer demands for compensation by billions of dollars, according to a Bloomberg News analysis today. GM asked federal judges in both states last week to delay litigation over the defect in several of its models until a U.S. bankruptcy judge in New York rules whether some accident victims’ claims can be brought without violating a sale order in its government-assisted bankruptcy in 2009.
http://www.bloomberg.com/news/print/2014-04-16/gm-move-to-freeze-lawsui…
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/