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General Motors Co filed a motion in a U.S. bankruptcy court to enforce a bar on lawsuits related to ignition defects in cars sold before its 2009 bankruptcy as it fights a class action lawsuit that seeks to set aside the restriction, Reuters reported today. The plaintiffs also filed a class action lawsuit yesterday, seeking an order declaring that GM cannot use the bankruptcy protection to absolve itself from liabilities. The faulty ignition switch has been linked to at least 13 deaths and the recall of 2.6 million GM vehicles. GM emerged from a government-assisted chapter 11 filing in 2009 as a different legal entity than the so-called old GM. Under those terms, the "new GM" shed liability for incidents predating its exit from bankruptcy, and any lawsuit related to pre-bankruptcy issues must be brought against what remains of old GM. "New GM's recall covenant does not create a basis for the plaintiffs to sue new GM for economic damages relating to a vehicle or part sold by old GM," the company argued in a court filing yesterday.
http://www.reuters.com/article/2014/04/22/gm-recall-lawsuit-idUSL3N0NE2…

For further analysis, make sure to attend the "Large Complex Trusts: A General Motors Case Study" panel at this week'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/

General Motors Co.’s bid to freeze a lawsuit over faulty ignition switches may compromise public safety, plaintiffs told a judge in California, calling the automaker’s claim that its 2009 bankruptcy shielded it from the old GM’s liabilities “irrelevant” and a “red herring,” Bloomberg News reported on Friday. GM recently defeated a consumer effort to have a court order the company to tell owners of recalled vehicles to stop driving their cars until the defect is fixed. A federal judge in Corpus Christi, Texas, said that U.S. regulators are better situated than courts to manage recall terms. The Detroit-based company has asked federal judges in California and Texas to delay litigation over the defects in cars it recalled until a bankruptcy judge in New York rules on whether some claims for compensation can be brought without violating a court order in its 2009 reorganization. The California plaintiffs said that they want to seek information from GM so they can decide whether they should ask the judge to tell GM to disclose more facts about its cars and expand its recall, perhaps also grounding the defective vehicles.

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/

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, Bloomberg News reported yesterday. 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 2009 reorganization. The aggressive legal strategy runs the risk of further damaging GM’s image with lawmakers and the public. A win in bankruptcy court would allow GM to declare it’s not responsible for defect liabilities, said Chip Bowles, a bankruptcy lawyer at Bingham Greenebaum Doll LLP. Bankruptcy Judge Robert Gerber’s 2009 order let the current GM reject its predecessor’s liabilities, including claims for damages based on design defects, the automaker said in filings in San Francisco and Corpus Christi, Texas. Judge Gerber’s original ruling on liability is “quite clear,” said Prof. Stephen Lubben of Seton Hall University School of Law. “Having the court reaffirm its order could head off attempts to litigate the issue before some other court, which might not be as well-versed in bankruptcy and the broad reach of the bankruptcy code.” Read more.
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/

A federal judge ruled that General Motors Co. doesn’t have to take the unprecedented step of telling car owners that 2.59 million vehicles it recalled are unsafe to drive until faulty ignition switches are fixed, Bloomberg News reported yesterday. U.S. regulators are better able than courts to tell the automaker how to manage its recall, U.S. District Judge Nelva Gonzales Ramos held today in Corpus Christi, Texas. The request for a so-called park-it order was made by the owners of a 2006 Chevrolet Cobalt who sued GM for the lost value of their car. They said that the order was the only “fail-safe solution” until defects in the Cobalt and other small-car models linked to 13 deaths are fixed. The judge said she denied the plaintiffs’ request in part because they didn’t need the order to advance their lawsuit against GM.

A U.S. safety regulator released new documents yesterday showing that General Motors Co. ordered a more robust ignition switch before the release of a new Cadillac, stemming from complaints the engine could turn off while driving when the ignition was bumped, the Wall Street Journal reported today. Delphi Automotive PLC, which made the defective switches used in 2.6 million small cars that are now being recalled, disclosed in a letter to U.S. regulators that GM engineers in February 2006 sought the change after test drivers reported the 2007 Cadillac SRX would stall when their knees bumped the ignition switch while driving.

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/

General Motors wants to delay a federal judge in San Francisco from ruling on a class-action case until a bankruptcy judge in New York decides whether the company is shielded from all product liability claims tied to crashes or defects before it exited bankruptcy in July 2009, the Detroit Free Press reported today. It was believed to be the first time since the recall of 2.6 million cars began in February that GM acknowledged it would ask a federal bankruptcy judge to protect it from claims. In the filing Friday, the company said that it would make the request based on protections given “New GM” in 2009. GM went through a bankruptcy reorganization funded by U.S. taxpayers five years ago that left most of its product liability with the old company, which mainly consisted of shuttered factories, some of which have since been sold. GM’s critics have argued that it should bear responsibility for a defect linked to 13 deaths and 32 crashes in North America.
http://www.freep.com/article/20140415/BUSINESS01/304150107/general-moto…

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/

A group of U.S. senators on Friday urged the Department of Justice to oppose any efforts by General Motors Co. to skirt financial responsibility related to the company's failure to promptly recall vehicles with ignition switch problems linked to 13 deaths, Reuters reported on Saturday. The five Democratic senators, in a letter to Attorney General Eric Holder, said that the Justice Department should "intervene in pending civil actions to oppose any action by GM to deny responsibility for damages." The senators were referring to the possibility that GM could use a legal loophole to avoid paying damages authorized by pending lawsuits. The company was reorganized in bankruptcy proceedings, with the "new" GM not responsible for the "old," pre-2009 GM. The senators also called on Holder to force GM to establish a victims' compensation fund and to ensure that consumers are adequately warned about driving cars that could have faulty ignition switches.
http://www.reuters.com/article/2014/04/11/gm-recall-senators-idUSL2N0N3…

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/

At least nine of the 13 deaths tied to General Motors ignition switch recall occurred before the company exited bankruptcy in July 2009, precluding survivors from filing lawsuits, according to documents released on Friday by a congressional committee’s staff, the Detroit Free Press reported on Saturday. The most recent fatality involving the 2003 through 2007 Chevrolet Cobalts and Saturn Ions occurred last June in Quebec. There are two fatal accidents involving 2004 Ions in a database with identities of the victims and dates undetermined. Under terms of their government-supported bankruptcies, the court and the Obama auto task force granted GM and Chrysler immunity from product liability and wrongful death lawsuits arising from accidents occurring before they came out of bankruptcy. CEO Mary Barra told Congress that GM has hired Kenneth Feinberg, the lawyer who oversaw compensation of victims of the 9/11 terrorist attacks and BP's 2010 Deepwater Horizon oil spill, to consider "options" in the automaker's response to its ignition-switch defect crisis.

The fallout from General Motors Co.'s troubled recalls escalated yesterday with the automaker raising its estimated costs to $1.3 billion and suspending two engineers involved in fateful early decisions, the Wall Street Journal reported today. The Detroit company's latest cost estimate for a series of recalls, including those covering faulty ignition switches linked to 13 deaths, has it preparing to post its first quarterly net loss since emerging from bankruptcy in 2009, analysts said. The charge — more than three times GM's original estimate — is greater than the company's year-ago first quarter profit, and more than the consensus forecast among Wall Street analysts for the quarter ended March 31.