A number of sealed documents in Garlock Sealing Technologies' chapter 11 bankruptcy accidentally got out, and now a federal judge has ordered them destroyed, the Rochester (N.Y.) Democrat & Chronicle reported today. In an order dated Monday, U.S. Bankruptcy Judge George R. Hodges said that anyone who on March 27 or 28 downloaded particular transcripts from the court's electronic case files system to destroy them. The transcripts were from hearings held in the summer of 2013 as part of the Palmyra manufacturer's bankruptcy and had to do with estimating how much company Garlock might have to reasonably pay in coming years to settle any asbestos-related personal injury lawsuits.
General Motors Co.’s failure to fully answer questions about why it waited years to recall 2.59 million small cars over a defect tied to 13 deaths is testing the patience of lawmakers and regulators, Bloomberg News reported yesterday. GM didn’t respond to more than one-third of requests made by the U.S. National Highway Traffic Safety Administration with an April 3 deadline and is being fined $7,000 a day. An agency lawyer called the internal probe the automaker cited “irrelevant” and threatened to refer GM to the Justice Department. Congressional leaders said that they’ll schedule more hearings and expect more disclosure next time from Chief Executive Officer Mary Barra.
General Motors Co. executives huddled last week with newly hired adviser Kenneth Feinberg to consider potential ways to compensate victims of an ignition-switch defect linked to at least 13 deaths, the Wall Street Journal reported today. The answer is far from straightforward as GM was allowed to leave behind legal claims by a host of car-accident victims as part of its 2009 bankruptcy proceedings. Among those are victims who likely suffered injuries in some of the roughly 2.6 million cars the automaker has recalled because of faulty ignition switches. How GM ultimately chooses to deal with those victims or their families could create more controversy as the company, eager to move on from a $50 billion government bailout and court restructuring, reaches back into its pre-bankruptcy past to reassess the way motorists injured or killed because of vehicle defects were treated. GM has said it first discovered the ignition-switch defect nearly a decade ago but didn't launch a recall until February. Lawmakers last week peppered GM Chief Executive Mary Barra with questions about the delay, with one pointing to a "culture of coverup" at the automaker. (Subscription required.) http://online.wsj.com/news/articles/SB100014240527023039104045794856338…
In related news, the in-house lawyers at General Motors Co. are slowly being pulled into the public questions over its ignition switch recall, Corporate Counsel reported today. House and Senate hearings revealed that GM’s legal department apparently played a role in delaying the recall. GM chief executive Mary Barra on Wednesday tried to explain to the Senate how the legal department could know about defects but failed to share that information — information that could have saved lives. Barra, at GM for 33 years, was an executive in the manufacturing and engineering division before becoming CEO in January. Sen. Claire McCaskill (D-Mo.) a former prosecutor and subcommittee chairwoman, said that GM’s lead switch engineer lied in a deposition in a suit last year about why a switch part was changed and the part number wasn’t changed, saying that he hadn’t approved it. The implication was that engineering was trying to hide the defect by replacing a faulty part and not assigning a new part number. (Subscription required.) http://www.corpcounsel.com/id=1202649856926?kw=GM%20In-House%20Lawyers%…
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 team and the value of a freely traded unit. For more information or to register, please click here: http://www.abiworld.org/ASM14/
The National Highway Traffic Safety Administration confirmed yesterday that it continues to receive answers and documentation from General Motors Co. regarding the ignition switch recall, but has yet to release a timetable on when the information will be made public, the Wall Street Journal reported today. GM said that it has submitted 200,000 pages of records and answered more than 65 percent of the 107 questions NHTSA has asked about the events leading to the recall. Separately, the company also said it has hired an outside crisis management adviser, Jeff Eller, to help in the recall response. This is the third high-level outsider GM has hired. Earlier this week, GM announced Kenneth Feinberg will help the company craft some type of financial response for victims. Meanwhile, Chicago attorney Anton Valukas is spearheading the internal investigation into the mishandling of the recall.
Senators yesterday accused General Motors of having a "culture of cover-up" that led to the deaths of 13 people, The Hill reported today. Often taking a prosecutorial tone with GM CEO Mary Barra, Sen. Claire McCaskill (D-Mo.), chairwoman of the Senate subpanel looking into the recall of more than 1 million GM vehicles due to a dangerous ignition switch flaw, said that the automaker had a "culture of cover-up that allowed an engineer to lie under oath repeatedly." Barra, who was facing senators one day after being grilled by lawmakers in the House, delivered largely the same responses as she did in a high-profile hearing in the lower chamber on Tuesday. But members on the Senate's Commerce, Science and Transportation subcommittee on consumer protection and product safety appeared to be even less accepting of the GM chief's attempts to separate herself from decisions that were made before she assumed the helm of the company this year. "You're new at your job, but you've been GM for how many years?" Sen. Barbara Boxer (D-Calif.) asked Barra, a second-generation General Motors employee who recently became the first woman to be placed in charge of a major U.S. automaker. She has worked for the company for 33 years. "Something is very strange that such a top employee would know nothing," Boxer said. At issue is GM's recall of more than 1.6 million vehicles that were found to have a defective ignition switches that caused the cars to shut off abruptly or have their airbags disabled. The Senate hearing Wednesday was attended by families of the 13 car crash victims who died in accidents that have been linked to the faulty GM parts. http://thehill.com/blogs/transportation-report/automobiles/202423-senat…
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 team and the value of a freely traded unit. For more information or to register, please click here: http://www.abiworld.org/ASM14/
General Motors Corp.’s hiring of noted claims attorney Kenneth Feinberg has raised the possibility that it might set up a fund to compensate victims of accidents linked to its recent recalls, but the announcement, made by CEO Mary Barra during testimony before Congress, has done little to placate the plaintiffs’ bar, the National Law Journal reported today. Prominent litigators said that Barra was evasive and provided little new information about GM’s handling of ignition switch defects that prompted recalls of 2.6 million vehicles. Although she had already apologized for the recalls, Barra’s House and Senate committee testimony on Tuesday and Wednesday marked the first time the company publicly addressed GM’s potential legal liability for defects that, according to lawsuits, the company had known about for the past decade. Under a provision of its bankruptcy, GM was absolved of liability for accidents that occurred before its 2009 filing. But several prominent consumer groups led by Public Citizen called on GM to waive that shield and establish a trust fund for victims of the defects, according to a letter they sent on Tuesday to Barra.
As families of crash victims lined the back of the House hearing room, displaying photos of their lost loved ones, Mary T. Barra, the General Motors chief executive, told lawmakers that the company was considering paying damages to victims of accidents in the millions of cars recalled for defective ignition switches, the New York Times reported today. To help decide, General Motors hired Kenneth Feinberg, the lawyer who handled payouts in the Sept. 11, 2001, victims fund and the Gulf of Mexico oil spill, she told a House committee investigating the company’s failure to fix a faulty part that it knew about for more than a decade. It was the first time GM had acknowledged that it may pay damages in accident cases that occurred before the company filed for bankruptcy in 2009, even though — to the increasing outrage of victims’ families — the company is legally protected by agreements made in bankruptcy court. Since February, GM has recalled 2.6 million Cobalts and other small cars because flawed ignition switches could suddenly cut off engine power and deactivate air bags. The company has linked 13 deaths to the faulty switch. http://www.nytimes.com/2014/04/02/business/gm-chief-expresses-remorse-a…
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 team and the value of a freely traded unit. For more information or to register, please click here: http://www.abiworld.org/ASM14/
Two Senate Democrats unveiled a plan on Tuesday that would require automakers to share more information about fatal accidents in an effort to help federal regulators uncover defects such as the flawed General Motors ignition switch that has been linked to at least 12 deaths, the Washington Post reported yesterday. GM has said that it knew about the defective switch for more than a decade before initiating a recall last month of 1.6 million Chevrolet Cobalts and five other small models. The National Highway Traffic Safety Administration had been looking into the defect for years but has said it did not have enough information to order a recall. The legislation by Sens. Richard Blumenthal (D-Conn.) and Edward J. Markey (D-Mass.) would require automakers to routinely submit accident reports or other documents to the NHTSA when they learned of a fatality involving one of their vehicles. The bill would require the NHTSA, in turn, to make the information available to the public in a user-friendly, searchable database.
General Motors Co. engineering managers knew about ignition-switch problems on the 2005 Cobalt that could disable power steering, power brakes and air bags, but launched the car because they believed the vehicles could be safely coasted off the road after a stall, the Wall Street Journal reported today. The new details about how GM employees viewed the ignition switch problem in the years after the Cobalt's 2004 debut emerged from depositions taken in a lawsuit filed after one of the dozen fatal accidents GM has linked to the problem. In those accidents, air bags failed to deploy after ignition switches slipped out of the "on" position. GM last month recalled 1.6 million vehicles to fix the switches. "That is what happened, yes," Gary Altman, program engineering manager for the 2005 Cobalt, said when asked in a June 2013 deposition whether GM made "a business decision not to fix this problem" before the Cobalt was launched in 2004. Altman insisted the flaw didn't put drivers at risk even in those cases where air bags failed to deploy. He was responding to questions by an attorney representing the family of Brooke Melton, a Georgia woman killed in a crash of her Cobalt that suffered ignition failure while driving at about 55 miles an hour.
Ford Motor Co. has filed a motion to unseal the records in the Garlock bankruptcy case, hoping to obtain evidence it needs to derail asbestos lawsuits against itself, Forbes.com reported yesterday. In a motion and accompanying memorandum of law filed with the federal bankruptcy court in Charlotte, N.C. late on Friday, Ford is seeking access to sealed testimony and exhibits that Bankruptcy Judge George R. Hodges relied upon to conclude that plaintiff lawyers had withheld evidence their clients had made conflicting statements about their asbestos exposure to different courts and bankruptcy trusts set up to pay claimants. In his January ruling slashing Garlock’s asbestos-related liabilities to $125 million, Judge Hodges cited the results of an examination of 15 plaintiff files which found that lawyers had withheld potentially important evidence of asbestos exposure from each of them. The judge stopped just short of calling the activity fraudulent, but said that the process “was infected by the manipulation of exposure evidence by plaintiffs and their lawyers.”
