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General Motors Co. was hit with a lawsuit on Wednesday demanding that the company be held liable for allegedly concealing ignition problems before its 2009 bankruptcy, Reuters reported yesterday. The ignition switch problems led to the recall of 1.6 million vehicles last month. GM is a different legal entity from the one that filed the 2009 bankruptcy that sent shock waves through the U.S. economy. The so-called new GM is not responsible under the terms of its bankruptcy exit for legal claims relating to incidents that took place before July 2009. Those claims must be brought against what remains of the "old" or pre-bankruptcy GM. But the proposed class action, filed in federal court in California, said plaintiffs should be allowed to sue over the pre-bankruptcy actions, "because of the active concealment by Old GM and GM."
http://news.yahoo.com/gm-must-pay-pre-bankruptcy-ignition-deception-law…

In related news, Chief Executive Officer Mary Barra is scheduled to testify at a U.S. congressional hearing on April 1 amid a probe into why it took more than a decade to recall vehicles equipped with an ignition defect that’s been linked to a dozen deaths, Bloomberg News reported yesterday. National Highway Traffic Safety Administration Acting Administrator David Friedman will also testify to the Oversight and Investigations Subcommittee of the House Energy and Commerce Committee, said committee chairman Fred Upton (R-Mich.).
http://www.bloomberg.com/news/2014-03-21/gm-ceo-barra-to-testify-before…

Two professional athletes scored in bankruptcy court this week when a judge allowed them to continue chasing after their former financial adviser, a man they’ve accused of cheating them out of money, the Wall Street Journal reported today. Bankruptcy Judge Christopher B. Latham lifted the shield of bankruptcy that was protecting financial adviser Bill Clay Crafton Jr. from the arbitration proceedings that two of his former clients—retired NFL player Aaron Shea and current Philadelphia Phillies pitcher Cole Hamels—launched last year. The athletes say that they trusted Crafton to invest their funds wisely but claim he was instead reckless with their money, violating state and federal securities laws in the process and committing fraud. Crafton has sought to defend himself against the allegations, which other pro athletes have also brought. Crafton has blamed his bankruptcy filing on the “onslaught” of litigation he’s faced in recent months.

Residential Capital LLC won what might only be an interim skirmish in a quest to get a federal district court to halt a lawsuit by the Federal Housing Finance Agency against Detroit-based parent Ally Financial Inc. and some of its affiliates, Bloomberg News reported yesterday. The eventual outcome of the suit is important because the agency isn’t part of the global settlement to be implemented through New York-based ResCap’s pending chapter 11 reorganization plan. In its role as conservator of Freddie Mac, the agency sued ResCap, Ally and affiliates alleging there were false and misleading statements in documents related to residential mortgage-backed securities that Freddie Mac purchased. After ResCap filed for bankruptcy, the agency dropped ResCap from the suit. ResCap was Ally’s mortgage-servicing unit. ResCap started a lawsuit in bankruptcy court contending that continuing to sue Detroit-based Ally and other non-bankrupt affiliates was still a violation of bankruptcy’s automatic stay.

American Airlines parent AMR Corp., which is planning to merge with US Airways Group, has asked a judge for another extension of its exclusive period to file a plan to exit bankruptcy, Reuters reported yesterday. The carrier and its unsecured creditors' committee asked the U.S. Bankruptcy Court yesterday to extend the time during which creditors cannot pursue their own restructuring plans for the airline to May 29. Currently, American has until April 15 to file its reorganization plan. American and US Airways announced their plan to combine last month in an $11 billion deal that would form the world's biggest airline.