Bankruptcy Judge Robert Gerber said yesterday that if General Motors Co. is found to have violated car owners' constitutional rights by hiding ignition-switch defects during its bankruptcy, he would consider narrowing the legal protections afforded the company under its 2009 bankruptcy sale, Reuters reported yesterday. The claims surround defective ignition switches that cut power to brakes, steering and airbags, a problem that resulted last year in the recall of an initial 2.6 million vehicles, and prompted GM to issue further recalls on other defects. GM's 2009 bankruptcy resulted in a sale of the company's profitable assets to the entity that now operates as General Motors Co. Its burdensome liabilities were shed and assigned to the "Old GM" trust, a shell with limited assets. GM says that the plaintiffs must seek compensation from the trust because their claims pertain to cars made before bankruptcy. GM has already agreed to pay compensation for those injured or killed due to ignition defects. The compensation will be paid from an out-of-court fund. Plaintiffs say they should be able to seek compensation from GM, rather than the trust, because the company concealed the defects when the bankruptcy sale was approved, violating their right to due process. Judge Gerber is not expected to rule for weeks or months.
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