The Roman Catholic Diocese of Helena in western Montana will soon ask a bankruptcy judge to approve a key settlement with its insurance carriers that will be used to compensate about 380 individuals who allege they were sexually abused by clergy members, the Wall Street Journal reported on Saturday. According to a legal notice released on Thursday, a $10.9 million settlement with six insurance carriers would be used to fund a proposed $15 million compensation package. In exchange, the insurance carriers would receive immunity from any future lawsuits related to the abuse claims. Ford Elsaesser, an attorney for the diocese, said Friday that the church would formally ask Bankruptcy Judge Terry Myers for approval of the settlement within a matter of days.
General Motors Co.'s record recalls of nearly 30 million cars and trucks across the globe, including those for ignition-switch defects, has so tainted the brand that every one of its customers has lost money, according to plaintiffs attorneys planning a nationwide class action against GM next month, the National Law Journal reported today. That claim will be at the heart of a consolidated complaint lead attorneys in the ignition-switch litigation plan to file by Oct. 14. GM, which has sought to limit its legal liability to claims arising from the ignition switch, moved in U.S. bankruptcy court on Aug. 1 to ban consumer class actions filed over the subsequent recalls.
A number of plaintiffs attorneys, hoping to jumpstart lawsuits over General Motors Co.’s ignition switch recalls, are challenging a court order that prevents them from pursuing their claims, the National Law Journal reported today. Bankruptcy Judge Robert Gerber has temporarily halted proceedings in consumer lawsuits filed over GM’s ignition-switch defect, which prompted recalls of 2.6 million vehicles this year. Plaintiffs lawyers in three cases, hoping to escape Judge Gerber’s stay order, assert that their claims aren’t subject to decisions in GM’s bankruptcy. So far, their challenges have been unsuccessful. “GM’s strategy in the bankruptcy court has closed the door to every court in America,” said Gary Peller, a professor at Georgetown University Law Center in Washington, one of the lawyers challenging the stay order. “This is a real abuse of the legal process.” GM, represented by Arthur Steinberg, a partner at King & Spalding in New York, alleges the claims are subject to the bankruptcy proceeding because they involve cars, trucks or automobile parts made before 2009, when the company filed for chapter 11 protection.
Freedom Industries Inc., the company behind a chemical spill that contaminated a significant swath of West Virginia's water supply, filed a creditor-payment plan that aims to start resolving the claims brought by those affected by the spill, the Wall Street Journal reported today. Freedom Industries in a Monday court filing provided an outline of its plan, on which creditors must eventually vote. That includes general unsecured creditors, who would receive nearly a dime for every dollar of the approximately $8.5 million they are owed. The proposal is buoyed by two recent settlements. The first is a $2.9 million compromise with attorneys representing local residents and businesses, with the money earmarked for health studies, water testing or other projects to benefit individuals as well as the businesses that were forced to close in the wake of the spill. The settlement would end about two dozen lawsuits filed against Freedom Industries. The other deal is one Freedom Industries struck in June with AIG Specialty Insurance Co., which provided insurance coverage to Freedom Industries before the Jan. 9 spill. The agreement calls for AIG to pay nearly $3 million to Freedom Industries, which has faced a number of claims in connection with the spill, from civil lawsuits to cleanup costs.
In the race to punish GM for the ignition-switch defect that prompted its recall of 2.6 million cars, some litigants are following their own roads through state courts rather than joining the New York litigation, in which more than 100 lawsuits have been coordinated for pretrial purposes under U.S. District Judge Jesse Furman, the National Law Journal reported today. GM identified many of the state court cases in a July 21 letter to Judge Furman, and acknowledged them in its July 24 quarterly report to the U.S. Securities and Exchange Commission, saying: "These cases are in their very early stages. No discovery has yet taken place." The 20 state lawsuits could influence the broader litigation. In a case against Toyota Motor Corp. alleging sudden acceleration brought on by electronic defects had caused a woman's death, for example, a jury in Oklahoma state court awarded $3 million last year. Months later, Toyota began settling hundreds of similar injury and death lawsuits that had languished in a related federal proceeding for three years. Although the GM cases are a long way from trial, some lawyers hope the state courts can give their clients a head start. Since the creation of the multidistrict litigation two months ago, GM has sought to remove as many cases as possible from state to federal court. Most of the cases still in state court have survived these efforts because they named as an additional defendant a local dealership that either sold or repaired the car. Almost all of the cases involve accidents that occurred after 2009, when GM filed for bankruptcy. GM has filed motions in bankruptcy court to bar claims over injuries and deaths that occurred before then. They are pending in Alabama, California, Florida, Georgia, Illinois, Michigan, New York and Texas, and more are expected.
The Roman Catholic Diocese of Gallup, N.M., has asked a federal judge for an additional eight months under bankruptcy court protection to continue negotiations with more than 100 individuals who allege they were sexually abused by clergy members, Dow Jones Daily Bankruptcy Review reported today. The church's exclusivity period, during which sexual-abuse claimants or others are barred from filing their own reorganization proposals, is set to expire Sept. 8. Citing a plan to begin mediation in the fall, the diocese asked Judge David Thuma of the U.S. Bankruptcy Court in Albuquerque, N.M., to extend that period through May 12, 2015, giving it time to reach a settlement with victims and file a plan to exit bankruptcy without interference from outsiders.
Lawyers for General Motors Co. customers are jostling to lead lawsuits over faulty ignition switches, Bloomberg News reported yesterday. Car owners suing over the lost value of recalled vehicles have yet to learn whether they can claim $10 billion, a few hundred thousand dollars, or nothing. That number will be decided later this year by Bankruptcy Judge Robert Gerber, who presided over GM’s bailout in 2009. Meanwhile about 100 delayed cases are in the hands of U.S. District Judge Jesse Furman in Manhattan. He told the customers yesterday at his first court conference that he will advance their suits as fast as possible, and encourage settlements, while at the same time try not to get in Judge Gerber’s way.
General Motors Co. is again trying to use "old" GM's chapter 11 case to protect itself from lawsuits related to an ignition-switch defect, this time the suits filed by drivers who got into accidents before the 2009 bankruptcy court sale, the Wall Street Journal reported today. Lawyers for GM said in a court filing on Friday that the wording of the sale order approved by the court places lawsuit liability with the old version of GM, not the new one. Plaintiffs would still be allowed to file claims for accidents as part of a program GM announced late last month, regardless of when their accidents occurred. Friday's filing pertains only to actual lawsuits filed against GM by victims whose accidents occurred before the 2009 sale approval. The issue of whether "old" GM, "new" GM or both GMs are liable is a big one for plaintiffs, regardless of why they are suing. The latest filing cites seven accidents involving Chevy Cobalt cars that were part of GM's recall of 2.6 million small cars for an ignition-switch defect, as well as one 2004 Chevy Malibu, which was also recalled. The drivers of those cars are suing GM without making a clear distinction between "old" and "new" GM, lawyers for GM said in the Friday filing.
A Texas lawyer on Tuesday filed a lawsuit against General Motors Co. on behalf of 658 people who the law firm alleges either died or were injured due to the automaker’s ignition switch defect, the Detroit News reported today. The lawsuit comes just days before independent compensation expert Kenneth Feinberg is to begin accepting claims for families of people who died or were injured tied to the faulty ignition switch. The suit was filed in U.S. District Court for the Southern District of New York and lists families of 29 people who died in vehicles allegedly tied to an ignition switch defect and another 629 injured. The plaintiffs are suing for wrongful death or injury in accidents that occurred after GM emerged from bankruptcy in July 2009.
Chrysler Group LLC was sued over allegedly faulty ignition switches in Jeeps, in a follow-up to more than 120 lawsuits General Motors faces over the same defect, Bloomberg News reported yesterday. Both automakers are accused of employing ignition switches that can be unexpectedly turned off, cutting power to brakes, steering and airbags and causing potentially deadly loss of control. The Chrysler lawsuit, filed yesterday in federal court in Riverside, California, follows the automaker’s announcement last week that it would recall almost 800,000 Grand Cherokees and Commanders made from 2005 to 2007 because a driver’s knee could bump the key out of the “on” position. Latoya Lumpkin, who owns a 2006 Jeep Grand Cherokee, filed the lawsuit as a class action, seeking to represent all U.S. owners of the recalled Chrysler vehicles. She’s asking for damages for these owners for lost use, repairs and diminished value, as well as an order to prohibit driving them until repairs are made.
