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General Motors Co., recalling an additional 2.7 million vehicles for potentially faulty brake lights and other issues, pushed its total number of cars and trucks called back for repairs in the U.S. this year to 11.2 million, the most ever for the automaker, Bloomberg News reported yesterday. The 2014 total through mid-May is more than GM recalled during the previous six years combined, according to National Highway Traffic Safety Administration records. The Detroit-based company’s previous peak year for recalls in the U.S. was 10.7 million in 2004, according to NHTSA records. Chief Executive Officer Mary Barra is already grappling with the recall of 2.59 million small cars for a defective ignition switch linked to 13 deaths. The bulk of yesterday’s five recalls cover 2.44 million Chevrolet, Pontiac and Saturn cars dating back to the 2004 model year. Corrosion can affect wiring and cause brake lights to fail to illuminate, Detroit-based GM said yesterday.

General Motors Co.'s board has stepped up its response to the controversy over the auto maker's handling of vehicle safety recalls, hiring a law firm to review how information about potentially dangerous defects flowed to its members, the Wall Street Journal reported today. Directors at the largest U.S. auto maker weren't previously apprised of the troubles with small cars stalling due to a faulty ignition-switch. They want their review to ensure that future vehicle safety issues move more quickly to their attention through the auto maker's management. Directors also have begun meeting as a group at least weekly with Chief Executive Mary Barra to monitor her overhaul of the company's operations.

The Georgia attorney whose wrongful death suit against General Motors Co. helped trigger the recall of 2.59 million cars is seeking to revive that case, alleging that the automaker fraudulently withheld information ahead of a settlement, Bloomberg News reported today. Lance Cooper’s latest legal maneuver may help generate more information about what GM knew — and to what strata of management that knowledge traveled — about faulty ignition switches the company has linked to at least 13 deaths in the past decade. Cooper filed a new complaint yesterday in Georgia state court in Marietta, asking a judge to reopen the matter, which GM settled in September with his clients, the parents of 29-year-old Brooke Melton. Melton died in 2010 when her 2005 Chevy Cobalt lost power in a crash linked to the defective switch. The filing by Cooper comes after another attorney pursuing injury and death claims stemming from the defective switches said on May 2 that he had held settlement talks with Kenneth Feinberg, the lawyer hired by GM to advise on its recall. While GM has agreed to address accident and death claims, it says court orders in the company’s 2009 bankruptcy absolved it of responsibility for financial damages.

General Motors Co. is offering owners of cars involved in the ignition-switch recall the same deep discounts to buy a new car usually given only to company employees, the Wall Street Journal reported today. The move is the latest sign that GM, spurred by feedback from its dealers, is shrugging off its initial reluctance and using the recall as an opportunity to sell new vehicles. Employee pricing sets the cost of a vehicle at just under the invoice price. The deal can be used on a new 2013, 2014 or 2015 model year Chevrolet, Buick, GMC or Cadillac. In March, GM began offering a $500 discount to consumers who wanted to ditch a recalled Chevrolet Cobalt, Saturn Ion or other older models to buy or lease a new GM product. Dealers say that the offer fell flat since many of the vehicles are secondary cars driven by younger adults or are owned by people who can't afford to buy a new car even with a discount.

A $100 million settlement between the owners of New England Compounding Center, the Massachusetts pharmacy connected to a deadly meningitis outbreak in 2012, and its controlling trustee was filed in bankruptcy court yesterday, the Wall Street Journal reported today. Under the settlement, the New England Compounding Center, its insurers and one of the company's affiliates will contribute more than $100 million to a compensation fund to be distributed to the pharmacy's creditors, including those who died or suffered significant injuries after receiving injections of tainted steroids traced to the pharmacy. The settlement, which had been expected, still requires approval from Judge Henry J. Boroff of the U.S. Bankruptcy Court in Boston before distributions can be made to victims. The trustee, Paul D. Moore, said he hopes to complete the process by the end of the year.

The General Motors Co. said that an engineering executive who led an inconclusive investigation into problems with ignition switches later linked to 13 deaths retired effective on Monday, the Wall Street Journal reported today. Jim Federico, chief engineer for the Detroit automaker's small cars and electric vehicles, retired from the company after 36 years to pursue other interests, the company said on yesterday. A GM spokesman declined to say if the retirement was connected to an internal probe over why it took near a decade to recall 2.6 million vehicles with potentially defective ignition switches and cylinders. Federico is the second executive-level GM employee to suddenly retire from the company. He reported directly to Chief Executive Mary Barra for a brief time in 2011 and then was placed under engineering executive John Calabrese when the product development division was reorganized in July 2012. That same month, Federico joined the ignition-switch investigative team. Barra has maintained she knew nothing of the switch problem until December of 2013, two months before the first recall was issued.

Bankruptcy Judge Robert Gerber on Friday urged settlement talks in a dispute between General Motors Co and plaintiffs seeking compensation for the lost value of their cars stemming from a massive recall over a faulty ignition switch, Reuters reported on Friday. Judge Gerber said that he would welcome the prospect of a resolution that avoided a "monstrous battle." "Frankly, it would be great if whatever money is available for injured people could go to them, and not to litigation costs and attorneys' fees," Gerber said at a court conference with GM and the plaintiffs. Gerber is the same judge who in 2009 oversaw GM's whirlwind chapter 11 bankruptcy case. Now facing dozens of lawsuits over a faulty ignition switch that has led to the recall of some 2.6 million vehicles, GM is asking Judge Gerber to enforce the bankruptcy shield, in a pre-emptive move aimed at staving off dozens of lawsuits from customers who say they took a financial hit from the recall. Under the plan approved by Gerber, GM channeled its liabilities into a shell known as "Old GM," while selling its profitable assets to "New GM," a separate corporate entity that took GM out of bankruptcy and now operates as General Motors Co.

General Motors Co. customers, who filed about 50 lawsuits demanding compensation for ignition-switch problems, picked three lawyers to speak for them in bankruptcy court when a judge considers the automaker’s request to pare their claims, Bloomberg News reported yesterday. At a meeting in New York yesterday convened by Edward Weisfelner of Brown Rudnick LLP, about a hundred law firms for GM car owners delegated their host and two others to put their views to Bankruptcy Judge Robert Gerber at a May 2 conference. Sander Esserman of Stutzman, Bromberg, Esserman & Plifka in Dallas and Elihu Inselbuch of Caplin & Drysdale in New York were the other two lawyers selected, Weisfelner said. GM wants Gerber to reaffirm rulings made during its 2009 bankruptcy, saying that customer demands for money aren’t allowed by those orders. The customers say that the Detroit-based carmaker didn’t tell the judge about its ignition-switch problems, so he needn’t renew his rulings.
http://www.bloomberg.com/news/print/2014-04-29/gm-customers-pick-lawyer…

Edward Weisfelner is the author of ABI’s latest book, Advanced Fraudulent Transfers: A Litigation Guide, available for purchase in the ABI Bookstore. http://bookstore.abi.org/advanced-fraudulent-transfers-litigation-guide

General Motors Co.’s request for court protection from car-owner suits seeking compensation for recalled autos with defective ignition switches was attacked as legally “unsupportable,” Bloomberg News reported yesterday. Car owners challenged GM’s position that it may compensate accident victims but not them, claiming in a court filing yesterday that GM committed fraud by not revealing the defects, allegedly known since 2001, or listing either group as creditors in its 2009 bankruptcy. In the reorganization, Bankruptcy Judge Robert Gerber freed GM from most liabilities, leaving intact some warranty obligations and accident responsibility. Bankruptcy lawyers said that it will be hard for car owners to reopen the case, which is good news for GM. Fitch Ratings said last month the automaker faced more risk from recall suits than the cost of fixing millions of cars or fines stemming from a federal regulatory probe.
http://www.bloomberg.com/news/print/2014-04-23/gm-car-owners-attack-aut…

For further analysis, make sure to attend the "Large Complex Trusts: A General Motors Case Study" panel tomorrow 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 trust such as liability claims. For more information or to register, please click here: http://www.abiworld.org/ASM14/

Lawyers pressing cases against General Motors say that the automaker concealed the controversial ignition defect when it "took billions of dollars in taxpayer money" during its government-sponsored bankruptcy in 2009, CNNMoney.com reported yesterday. The claim, made by plaintiffs attorneys seeking court approval to bring class action suits against GM, came in court documents filed in federal bankruptcy court on Monday. GM also filed court papers on Monday seeking to protect itself from suits related to the ignition switch recall, which the company has tied to at least 13 deaths. The plaintiffs' lawyers argue that GM should not be able to use its bankruptcy reorganization as a shield against liability in cases stemming from the faulty ignition switch.

For further analysis, make sure to attend the "Large Complex Trusts: A General Motors Case Study" panel at this week'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 trust such as liability claims. For more information or to register, please click here: http://www.abiworld.org/ASM14/