%1

General Motors Co. has been hit with its biggest lawsuit so far over serial recalls, brought on behalf of drivers of 27 million vehicles seeking more than $10 billion in compensation for fallen car prices, Bloomberg News reported yesterday. The would-be class action against GM seeks to represent owners who bought or leased a recalled car from July 2009 to July 2014 and still have it, sold it after mid-February when the recalls started, or had an accident that destroyed it after that date. More than 20 million customers could join the suit, said Steve Berman, one of the plaintiffs’ lawyers. Detroit-based GM spurred the price drops by hiding at least 60 serious defects in around 27 million vehicles sold in the U.S., according to the complaint filed yesterday in federal court in Manhattan against “New GM,” as the carmaker became known after its 2009 bankruptcy and government bailout.

The Roman Catholic Diocese of Gallup, N.M., which filed for bankruptcy protection late last year as a result of mounting litigation tied to sexual-abuse claims, has chosen a mediator to oversee negotiations with more than 100 claimants, Dow Jones Daily Bankruptcy Review reported today. At a bankruptcy court hearing convened last week, lawyers for the diocese and a committee representing the abuse claimants said that they had selected retired Judge Randall Newsome to serve as mediator and to try to guide the two sides toward a settlement.

A bankruptcy trustee looking to recover money for those affected by a deadly 2013 train derailment has turned his attention to more than a dozen companies that may have played a role in the accident, Dow Jones Daily Bankruptcy Review reported today. In court filings on Thursday, Robert Keach, the trustee for train operator Montreal Maine & Atlantic Railway Ltd., said that he is seeking information from energy companies Shell Oil Co., ConocoPhillips, InCorr Energy Group and Enserco Energy Inc. to help him determine whether he can pursue legal action against the companies. Keach said that the four filings are "the tip of the iceberg" and that he is speaking with close to 20 companies that either leased tank cars to MM&A or produced the oil being transported.

Fiat Chrysler Automobiles recalled about 350,000 vehicles around the world yesterday to repair a faulty ignition switch that in some cases could cut power to the vehicle's air bags, steering and the engine, the Wall Street Journal reported today. The automaker said that ignition keys on certain 2008 model-year vehicles may not fully return to the "on" position after starting. As a result, the windshield defroster and wipers would lose power. In some circumstances, a key would return to "accessory" mode, cutting power to the steering and air bags, it said. The recall includes 2008 model-year Dodge Charger sedans, Dodge Magnum, Dodge Magnum station wagons, Chrysler 300 sedans, Jeep Commander and Jeep Grand Cherokee sport-utility vehicles. It covers an estimated 292,224 vehicles in the U.S.; 18,976 in Canada; 4,947 in Mexico; and 33,295 sold elsewhere. Chrysler's ignition-switch problem bears a close resemblance to the trouble that led General Motors Co. to recall 2.6 million small vehicles. The automaker, like GM, advised drivers of the affected cars to avoid key rings and use a single key.

The mediation involving the Catholic Archdiocese of Milwaukee and its creditors — aimed at bringing an end to its nearly four-year-old bankruptcy — has concluded with no agreement on compensating the church's victims of childhood sexual abuse, the archdiocese said yesterday, according to the Milwaukee Journal Sentinel. Lawyers for the archdiocese, its $60 million cemetery trust, its insurance companies, the bankruptcy creditors committee and the largest group of victims met with a mediator in Minnesota on Monday for the second time this month. The latest mediation, requested by the archdiocese, was the third failed attempt at a negotiated settlement since 2010. The failure means the parties will return to federal court for a new round of costly battles in a bankruptcy case in which legal fees have already topped $13 million. Before entering bankruptcy, the archdiocese paid at least $33 million in settlements, therapy, legal fees and other costs associated with the sex abuse crisis, according to its website. The archdiocese filed for chapter 11 in January 2011 in an effort to deal with mounting sex abuse claims, several of which were heading to court and potentially devastating legal judgments.

U.S. District Judge Jesse Furman on Friday ordered discovery to begin for some cases filed against General Motors Co. in connection with its recall of millions of cars for a faulty ignition switch, Reuters reported on Friday. Judge Furman said that plaintiffs could begin requesting documents from the company related to accidents, injuries and lost vehicle value linked to the switch that allegedly occurred after GM emerged from bankruptcy in 2009. Since the beginning of the year, GM has recalled nearly 15 million vehicles worldwide over potentially defective ignition switches. The company has set up a program, run by lawyer Kenneth Feinberg, to compensate victims of crashes involving about 2.6 million of those cars, mostly Cobalts, Ions and other small cars. The program has so far identified 19 deaths linked to the defect.

The Diocese of Stockton (Calif.) said that it has received 34 claims of sexual abuse since it notified the public of a deadline to file such claims imposed by a bankruptcy court, the Stockton Record reported today. The diocese also announced that no priest in active ministry was named in those claims. Diocese leaders filed for chapter 11 protection in January, saying that its finances have been drained by legal costs and settlements arising from claims of child sexual abuse by priests. Over the past two decades, those costs have mounted to $32 million for the diocese, which oversees parishes in San Joaquin, Calaveras, Stanislaus, Tuolomne, Alpine and Mono counties. Following the bankruptcy filing, the courts set Aug. 15 as the deadline for anyone thereafter to file such a claim.

A federal bankruptcy judge has rejected West Virginia American Water Company’s effort to block a class-action settlement between Freedom Industries and thousands of victims of January’s Elk River chemical spill, the Charleston (W.Va.) Gazette reported today. Bankruptcy Judge Ronald Pearson approved a proposal from Freedom Industries and lawyers for Kanawha Valley residents for the filing of a new class-action lawsuit that would provide a nearly $3 million settlement that would be used for health studies, water testing or other projects to benefit residents affected by the spill. The ruling by Pearson is the latest twist in the multiple court cases and investigations related to the January spill of a mixture of Crude MCHM and other chemicals from a Freedom Industries chemical tank located just 1.5 miles upstream from West Virginia American’s regional water plant. The plant serves about 300,000 people in Charleston and the surrounding communities. In July, lawyers for area residents and businesses filed court documents indicating that they had reached a proposed settlement with Freedom Industries for the company to turn over about $2.9 million that Freedom is likely to get from its insurance company.

A House committee investigating the National Highway Traffic Safety Administration has found that federal regulators had ample information to identify the dangerous ignition defect in General Motors’ Chevrolet Cobalt and other cars as early as 2007, the New York Times reported today. The House report details how investigators from the agency repeatedly discounted information that did not match their assumptions — at one point a staff member referred to their efforts as “beating a dead horse.” As a result, many of GM’s small cars, which had defective ignition switches that were prone to turn off and disable air bags, continued to crash, sometimes with fatal results.
http://www.nytimes.com/2014/09/16/business/regulators-are-faulted-in-de…

In related news, a program established by General Motors to compensate the families of people killed and those severely injured in accidents caused by defective ignition switches installed in 2.6 million cars received 445 claims and approved 31 in its first six weeks of operation, the law firm running the program reported Monday, according to the Washington Post. The flow of claims has not been as fast as what was anticipated by the law firm of compensation specialist Kenneth R. Feinberg, which the automaker hired to design and administer the compensation program. Of the 31 claims approved, 19 involve deaths related to the crashes, the law firm reported. Four are to compensate people left with permanent conditions, including paralysis, severe burns and brain injuries. And eight are for physical injuries that required hospitalization or outpatient medical treatment within 48 hours of an accident involving an ignition switch.
http://www.washingtonpost.com/business/economy/general-motors-compensat…

After General Motors emerged from bankruptcy and a government bailout five years ago, the board of directors of the “new GM” was expected to keep a more watchful eye on a company that had gone seriously off track, the New York Times reported today. But on the issue of vehicle safety, the board until recently took a mostly hands-off approach, rarely even discussing the topic beyond periodic reviews of product quality with company executives, according to interviews with current and former board members, as well as GM officials with knowledge of the board’s actions. In February, the initial recall of hundreds of thousands of cars with defective ignition switches was treated in such a routine manner at the board’s monthly meeting that the board’s chairman, Theodore M. Solso, said he had only a vague recollection of the details. Since February, GM has been rocked by additional recalls totaling nearly 30 million vehicles, as well as by disclosures that some company officials had known about the defective switches for more than a decade. At least 13 deaths have been linked to the defect; the automaker is the subject of multiple investigations and has set aside nearly $4 billion to cover its costs.