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The global recall of Takata Corp's defective air bags widened last week and the number of confirmed deaths rose, but legal experts said that the bigger worry for car companies caught in the fallout is playing out in a Delaware bankruptcy courtroom, Reuters reported today. Earlier this month, people injured by the air bags, which degrade over time and can inflate with excessive force, were appointed to their own official committee in the Japanese company's U.S. bankruptcy, giving them a powerful voice in the proceedings. This committee, which includes people whose cars lost value due to the recall, will be pitted against Honda Motor Co, Toyota Motor Corp, and other automakers. The car companies have been trying to use the bankruptcy to limit their liability for installing the faulty air bags, said Kevin Dean, a Motley Rice attorney who represents injured drivers on the committee. Because the committee has official status, Takata must provide it with funds which can be used to investigate the automakers' liability or to challenge financial assumptions. Without a committee, plaintiffs' lawyers would typically have to pay for that themselves. “If I were a plaintiffs’ lawyer, this would be a golden goose for me,” said John Pottow, a professor at the University of Michigan Law School, of the appointment of the special committee. In the Takata case, the committee of injured drivers will sit alongside another made up of suppliers and vendors, who are likely more interested in the future of the business than compensation disputes, according to bankruptcy attorneys who are not involved in the case. Both committees were appointed by the U.S. Trustee's Office. Seventeen fatalities, including one confirmed last week, and at least 180 injuries have been tied to Takata's air bags since at least 2009. Read more. 

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The U.S. Supreme Court cleared the way for General Motors Co. to potentially face billions of dollars in legal claims over a deadly ignition-switch defect, turning away the carmaker’s appeal in a clash connected to its 2009 bankruptcy sale, Bloomberg News reported yesterday. The justices, without comment, left intact a federal appeals court ruling that said the bankruptcy accord didn’t block GM from lawsuits over accidents that happened before the sale or claims that the flaw caused vehicles to lose value. Plaintiffs’ lawyers have estimated that claims against the company may total as much as $10 billion. The Supreme Court’s action is a setback for GM Chief Executive Officer Mary Barra, whose first year in the job was consumed by the ignition flaw linked to at least 124 deaths and recalls of 2.59 million vehicles. The Supreme Court’s decision creates a small risk that GM will have to reach a legal settlement that could interfere with paying out its dividend or buying back stock, said David Whiston, a Morningstar Inc. analyst.