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Mary T. Barra, chief executive of General Motors, came under attack again by a House committee yesterday for GM’s long failure to recall defective small cars, and now faces further investigations into its safety issues, including a revelation that an employee experienced stalling problems in 2005 in a Chevrolet Impala that was not recalled until this week, the New York Times reported today. The hearing was an opportunity for GM to rebuild credibility with lawmakers, as well as the family members of crash victims who packed the room, after admitting in February that it failed for more than a decade to recall millions of defective cars tied to at least 13 deaths and 54 accidents. The most damaging moment came when House Energy and Commerce Committee Chair Fred Upton (R-Mich.) produced a string of emails from 2005 showing that one employee had alerted others about a stalling incident in an Impala. The employee, Laura J. Andres, wrote that the Impala she was driving at 45 miles an hour had inexplicably shut off when she hit a bump.

The Quebec government said yesterday that it was seeking some C$409 million ($377 million) from Montreal, Maine and Atlantic, the insolvent rail operator at the center of the rail disaster in the town of Lac-Megantic last year, Reuters reported yesterday. The claim is the latest in a growing list against the rail operator and other companies involved in the train shipment of oil from the Bakken fields that derailed and exploded, killing 47 people in the small Quebec town. The government, which filed its claim with court officials handling the claims process, said C$126 million was for funds already spent, while the remainder was for expenses it expected to incur. The government said that the size of its claim may be revised upward, once all its expenses were determined.

General Motors Co. said that the engineer responsible for flawed ignitions linked to 13 deaths also oversaw switches in more than 3 million cars recalled yesterday, Bloomberg News reported yesterday. The recall covers seven different models and involved ignitions slipping out of the “run” position, like the action that covered 2.59 million small cars earlier this year. While the newly recalled vehicles have a different switch, they shared the same design release engineer. Ray DeGiorgio was named in an internal report released this month as being responsible for the faulty ignition switch in Chevrolet Cobalts and Saturn Ions recalled in February. He and 14 other people were ousted by Chief Executive Officer Mary Barra for their roles in the company’s mishandling and years-long delay in recalling the fatally flawed vehicles. GM yesterday called back 3.36 million more vehicles, including some Chevrolet Impalas and Cadillac Devilles, just two days before Barra returns to Congress to answer questions about why the company waited years to fix the Cobalt and Ion. GM said that its second-quarter charges to cover its safety actions would reach $700 million.

When General Motors Co. entered bankruptcy court five years ago, it used the laws to slash labor costs, shed factories and rid itself of billions of dollars in debt, the Wall Street Journal reported today. Now the automaker is turning to chapter 11 to try to solve a new problem: potential liability stemming from the ignition-switch problems that emerged publicly in February. In recent weeks, the company's lawyers have argued that the 2009 bankruptcy filing, in which the debt-laden "Old GM" sold its best assets to a new, government-backed company and left the rest behind, shields it from certain liabilities stemming from its ignition-switch problems. Whether GM gets stuck with a tab for those liabilities, which could run into the billions of dollars, is now largely in the hands of Bankruptcy Judge Robert Gerber. GM's argument — that it is unfair to make the company pay for liabilities it expressly gave up five years ago — holds appeal, said David Skeel, a bankruptcy expert and law professor at the University of Pennsylvania. "The point of corporate bankruptcy is to bring all the stakeholders into one place, resolve the problems and start over," he said. "When you allow multiple bites at the apple," he added, the bankruptcy process "falls apart." Skeel and others say that, in rare situations, it makes sense to allow creditors to "re-open" a bankruptcy reorganization to press old claims. A company, for instance, shouldn't be allowed to hide possible liabilities, then claim they are wiped away with its bankruptcy filing in the rear-view mirror. "The plaintiffs here have a sympathetic argument — that you can't just cut off a creditor's rights without first giving them notice" that those rights exist, said Stephen Selbst, a bankruptcy lawyer in New York not involved in the GM case.

General Motors Co.’s delayed decision to recall almost 2.6 million cars for ignition-switch defects is being investigated by attorneys general in Florida, Connecticut and at least six more states, Bloomberg News reported yesterday. GM has acknowledged 13 deaths tied to the defect, which can cut power to a vehicle’s steering and brakes and prevent air bags from deploying in a crash. Company executives were aware of the defect for at least a decade before the recall. Attorneys general in Connecticut, Indiana, Arkansas, Illinois, Iowa, Kentucky and Louisiana are also investigating, representatives from their offices confirmed yesterday. Separately, federal prosecutors in Manhattan are running a probe. The company this month fired 15 people it said played a role in the recall delay. It announced the firings immediately after releasing the results of an internal investigation led by former Chicago U.S. Attorney Anton Valukas, now chairman of the law firm Jenner & Block LLC. GM faces about 85 federal lawsuits filed by car owners claiming their vehicles lost value as a result of the recall and more claims over injuries and deaths attributed to crashes.

The personal injury lawyers repeatedly painted as the villains in Garlock Sealing Technologies' chapter 11 case are hitting back, claiming that the company is in fact the one withholding evidence, the Rochester (N.Y.) Democrat & Chronicle reported today. The asbestos personal injury claimants’ committee last week filed a motion in bankruptcy court asking Judge George Hodges to revisit a ruling early this year about Garlock's financial obligations to people suffering from asbestos-related health claims. "Garlock has committed a fraud upon the court," the committee wrote in a memorandum supporting its motion, claiming that the Palmyra company cherry-picked evidence that it presented to Hodges — the same legal chicanery Garlock has accused attorneys of. The fight revolves around a ruling by Judge Hodges in January that the company would likely have to pay no more than $125 million to settle any current and future mesothelioma claims against it — mesothelioma being a rare cancer of the lining around the lungs. A pair of bankruptcy committees of attorneys representing plaintiffs or future plaintiffs against Garlock had argued for a figure in excess of $1 billion. The Wayne County gasket and seal maker has been a defendant in literally thousands of asbestos-related lawsuits dating back decades. But when it filed for chapter 11 bankruptcy protection in June 2010, it cited a recent wave of substantial verdicts against it in mesothelioma cases. In his January ruling, Judge Hodges said that Garlock had demonstrated that numerous other manufacturers were almost surely far more responsible for any mesothelioma cases than would have come from the relatively small doses of low potency asbestos once associated with Garlock's seals and gaskets. He also was particularly condemning of plaintiff legal tactics, writing that as a number of other large thermal insulation companies went bankrupt, and attorneys began suing Garlock more, "evidence of plaintiffs' exposure to other asbestos products often disappeared (and) certain plaintiffs' law firms used this control over the evidence to drive up the settlements demanded of Garlock."

General Motors’ self-confessed failures in an internal report released last week are attracting lawyers who forged some of the biggest civil settlements ever, from the landmark tobacco litigation to the Exxon Valdez disaster to Toyota Motor Corp.'s unintended-acceleration problems, the Wall Street Journal reported today. More than 80 ignition-switch-related civil lawsuits have been filed against GM, most seeking alleged economic damages, such as repair costs and declines in resale value on about 2.6 million cars recalled since February. The average depreciation claim alone might total $500 to $1,000 per car, according to lawyers who have filed suits against GM. The company also will have to fight suits claiming the defective ignition switches caused serious injuries and deaths. (Subscription required.)
http://online.wsj.com/articles/plaintiffs-lawyers-take-aim-at-gm-for-re…

In related news, General Motors Co. announced four new recalls on Friday in keeping with a continuing initiative to review its entire vehicle portfolio in response to the ignition-switch recall scandal, the Wall Street Journal reported today. Chief Executive Mary Barra had said on Thursday more recalls were expected as the company reviews all of its vehicles for potential problems. The company recalled 57,512 of its 2014 Chevrolet Silverado and GMC Sierra pickups along with some 2015 Silverado, Tahoe, Suburban, GMC Sierra, and Yukon models since the base radio may not work, preventing audible warnings if the key is in the ignition when the driver's door is opened. (Subscription required.)
http://online.wsj.com/articles/gm-announces-four-new-recalls-1402085010…

Lawyers representing asbestos claimants in Garlock Sealing Technology LLC's chapter 11 case are lobbying to reopen an issue that a bankruptcy judge decided earlier this year, which reduced the company's asbestos liability to $125 million from the $1.3 billion plaintiffs' lawyers sought, Dow Jones Daily Bankruptcy Review reported yesterday. The committee representing personal injury claimants says that Garlock withheld crucial evidence, which amounts to fraud on the court. In a 63-page motion, the committee argued that Garlock had or could have had access to information it claimed not to have access to during its pre-bankruptcy settlement negotiations.

General Motors Co.’s internal investigation into why it took more than a decade to recall vehicles linked to fatal flaws will lead to employees being dismissed and clear Chief Executive Officer Mary Barra of wrongdoing, Bloomberg News reported today. Barra will deliver Valukas’s findings at a town hall meeting today with employees in suburban Detroit. The investigation isn’t expected to contradict her previous claims that she was unaware of the flawed switch. It will also clear GM’s top lawyer, Michael Millikin, while Ray DeGiorgio, the engineer in charge of the flawed part, will be among a number of employees to depart the company. The report marks a pivotal moment in Barra’s efforts to change the culture of America’s largest automaker after the biggest legal and public-relations challenge since its government-backed bankruptcy in 2009. Barra, who became CEO shortly before the scandal broke, has attempted to persuade Congress and customers that the safety woes reflect the so-called old GM, not the financially healthy, post-bankruptcy version.

GM will face skeptics of its in-house inquiry into the recall crisis, but company officials increasingly believe that CEO Mary Barra will be cleared of wrongdoing in the recall crisis after a three-month investigation by Anton R. Valukas, the New York Times reported today. Valukas’s report is expected to name executives, employees and departments within GM responsible for the delayed recall, and recommend broad corporate and personnel changes at the nation’s largest automaker. The departments under the most scrutiny are engineering, legal, product investigations and regulatory affairs — all of which had knowledge of the switch problems at various times, according to company documents given to regulators. Yet the top officers of the company, particularly Barra, have yet to be directly tied to GM’s failure to recall older-model Chevrolet Cobalts and other defective small cars.