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General Motors Co. customers demanding compensation for the eroded value of recalled Cobalts and Ions will hear today how their lawyers plan to fight for the right to sue the carmaker, Bloomberg News reported today. In the Manhattan court where the U.S. financed the automaker’s turnaround five years ago, Bankruptcy Judge Robert Gerber will probably hear that rulings he made freeing GM from responsibility for decreased car values don’t apply to owners of vehicles recalled over faulty ignition switches. The automaker never gave those car buyers a chance to have their say in his court during its 2009 bankruptcy, their lawyers contend. GM knew about the defective switches and broke the rules by not informing customers, the lawyers have said. For its part, GM wants Judge Gerber to affirm his earlier rulings that it’s protected from liabilities after its reorganization.

General Motors Co. recalled 8.45 million more vehicles yesterday and surpassed the record for U.S. safety fixes by an automaker in a calendar year, as Chief Executive Officer Mary Barra steps up efforts to shed the automaker’s reputation for foot-dragging on defective parts, Bloomberg News reported yesterday. The announcement yesterday came less than four hours after Kenneth Feinberg, the lawyer behind the 9/11 victim funds, finished announcing terms of a broad plan for GM to compensate victims of an earlier ignition recall of 2.59 million small cars. Those cars’ faults, linked to at least 13 deaths, ignited a crisis for the automaker that’s led to a reorganization of its engineering department, the ouster of 15 people, testy congressional hearings and a reexamination of past vehicles for safety problems. Most of yesterday’s vehicles, or 8.23 million, are older models being recalled for unintended ignition-key rotation, including Chevrolet Malibus from model years 1997 to 2005 and Cadillac CTS cars from model years 2003 to 2014. Consumers have so far continued buying GM cars and trucks with little regard for the recalls, and the company’s stock has remained buoyant on signs that sales are holding up in the crucial U.S. market.

A prominent compensation expert hired by General Motors is scheduled to announce a plan today to distribute money to victims of accidents caused by the automaker’s defective ignition switch, the New York Times reported today. But the payouts — which could cost GM billions of dollars — may not fully put the worst safety crisis in the company’s 106-year history behind it. While many victims and their families will be compensated, federal prosecutors and congressional investigators say that GM remains in their cross hairs for possible criminal behavior related to the handling of the defective vehicles. Efforts by GM to move beyond the ignition issue, both through the compensation plan developed by the expert, Kenneth R. Feinberg, and a recently unveiled internal investigation by the former U.S. attorney Anton R. Valukas, have done nothing to slow down or redirect the criminal investigations, according to federal investigators.

Federal prosecutors are issuing grand jury subpoenas in connection with General Motors Co.'s years-long delay in responding to a deadly defect, as new documents raise questions about the auto maker's assessment of which employees were at fault, the Wall Street Journal reported today. Delphi Automotive PLC said that it has received a grand jury subpoena and turned over documents relating to the production and design of ignition switches used in 2.6 million GM cars built during the previous decade. Defects in those switches led to accidents in which air bags failed to deploy and at least 13 people died. GM had previously disclosed a Justice Department investigation, but the subpoenas are a sign that the probe is picking up steam. GM has already paid $35 million to settle charges that it violated federal auto safety regulations. However, a criminal investigation by a federal grand jury could pose a much larger threat. Toyota Motor Corp. in March paid $1.2 billion to settle a Justice Department criminal investigation of its mishandling of safety problems.

Thirty men who were sexually abused decades ago as children at two Catholic schools in the Seattle area will split about $12.1 million from the Archdiocese of Seattle, which owned the schools, Dow Jones Daily Bankruptcy Review reported today. The deal between the victims and the Archdiocese of Seattle will end several lawsuits that had been filed in Washington state over incidents of abuse that took place at Bishop O'Dea High School and the now-closed Briscoe School, a boarding school, starting in the 1950s. The Archdiocese of Seattle will pay for the settlement using insurance money, according to Archbishop Sartain's statement.

A fund set up by General Motors Co. to compensate victims of crashes linked to defective ignition switches could offer payments for anyone injured or killed in a crash in which the car's air bags didn't deploy, the Wall Street Journal reported today. Compensation expert Kenneth Feinberg, who will administer the fund, is expected to outline details of the victims' fund as early as next week. Families of people killed or injured in one of the 2.6 million recalled cars could opt out of accepting payments from the fund if they want to sue the auto maker. The company has said it is protected from product-liability claims by its 2009 bankruptcy. GM has said it doesn't know how much money it could pay out through the fund Feinberg will oversee. The company has said that it knows of 13 people who died in crashes in which air bags failed to deploy because the car's ignition switch had slipped out of the run position before the collision.

The U.S. Supreme Court tightened the limits on class-action lawsuits by shareholders, giving a partial victory to Halliburton Co. while stopping short of abolishing those suits altogether, Bloomberg News reported yesterday. Halliburton and business groups had sought to overturn a 1988 precedent and effectively end class-action fraud suits over securities bought on public exchanges. A divided court today refused, with Chief Justice John Roberts saying Halliburton hadn’t shown “the kind of fundamental shift in economic theory” that would warrant overruling the precedent. The court instead made it easier for defendants to prevent approval of a class action, a certification that can ratchet up the pressure on a company to settle. Roberts said that a defendant can block a class action by showing that an alleged misstatement didn’t affect a company’s stock price.

The next challenge for GM amid its recall of 2.6 million vehicles after years of inaction is how to deal with hundreds of injury claims that the company has refused to discuss or characterize, the New York Times reported today. Some experts predict the cost to the company could run into the billions of dollars, exceeding the payouts related to deaths linked to the defect. Kenneth R. Feinberg, the victim-compensation expert hired by the company, is nearing the final stages of an elaborate process to determine who is eligible for payments and for how much. His plan, which is expected to be made public in the next two weeks, is seen as critical to the company’s ability to move beyond an issue that has prompted numerous investigations, congressional hearings, a $35 million federal penalty and withering public criticism. While it will not come cheap, getting the payment plan right is crucial. Too generous and it could slow the automaker’s comeback from bankruptcy; not generous enough and victims will seek justice through lengthy and costly court battles, further dragging out the company’s turmoil.

Bankruptcy Judge Susan V. Kelley ruled on Friday that she does not have jurisdiction to approve the Archdiocese of Milwaukee's reorganization plan while key questions in a related lawsuit over $60 million it holds in trust for the maintenance of cemeteries are pending before the Seventh Circuit Court of Appeals, the Milwaukee Journal Sentinel reported today. The decision is a victory for the creditors committee, which had sought to block approval of the plan until the appellate judges rendered their decision — a process some have said could take a year. And it has forced the cancellation of the October confirmation hearings, at least for now — a setback for the archdiocese. At issue before the Seventh Circuit is whether forcing the archdiocese to put even $1 of the cemetery trust into the bankruptcy estate — and ultimately a settlement for clergy sex abuse survivors — would violate its free exercise of religion under the First Amendment and the 1993 Religious Freedom Restoration Act. Judge Kelley ruled earlier that it would not. She was overturned by U.S. District Judge Rudolph T. Randa, who found that cemeteries and their proper care play a central role in the Catholic belief in the resurrection of the body after death. The appellate court also is considering a request by the creditors committee that Randa be barred from hearing any issues related to the cemetery trust because of a conflict of interest.

The planned demolition of a chemical-storage facility at the site of a January spill that tainted West Virginia’s water supply recently faced an unexpected setback — heavy rain, the Wall Street Journal reported today. The chief restructuring officer of Freedom Industries Inc., the now-bankrupt company that owns the site of the spill, said in a Tuesday bankruptcy filing that potentially chemical-laced water from the Etowah River Terminal facility flowed into the nearby Elk River on two consecutive days last week. Mark Welch, Freedom’s chief restructuring officer, blamed the improper water discharge on “the combination of heavy rainfall and the failure of those responsible for the site to follow established protocols.” Those failures include not having any employees on the scene at the time of last Thursday’s downpour and pumps that didn’t activate when they were supposed to. Despite taking action Friday morning, more water overflowed into the river during another storm that evening, Welch said. The West Virginia Department of Environmental Protection issued notices of violation for the seepage, Mr. Welch said. The leaked water is still being tested by the department to see if it contained unhealthy traces of chemical compounds.