Pre-bankruptcy ignition switch claims against GM dismissed

by | Apr 17, 2015 | Car Accidents

There has been little news recently about the ignition switch recall that affected millions of vehicles across the United States last year. However, it is expected that lawsuits will continue to be filed against the automaker as more injuries and deaths are determined to be caused by the defect.

In fact, Kenneth Feinberg, the attorney hired by General Motors to administer claims lodged against the company recently announced that the death toll attributable to the defect has risen. Last week, Mr. Feinberg announced that 80 people had been killed in accidents caused by the ignition switch defect. This week, that number increased to 84.

Nevertheless, there are scores of lawsuits that will not be allowed to continue because of a federal district court ruling that the 2009 bankruptcy essentially discharged claims that arose before the company emerged from Chapter 11 bankruptcy in July 2009. Essentially, the court ruled that the current company purchased assets from the former entity “free and clear” of legal liabilities, which included a number of defective products lawsuits.

Lawyers who represented clients in such lawsuits were deeply disappointed that their claims basically were turned to dust. One lawyer explained that his clients would never get justice while General Motors continues to make billions.

In the meantime, products liability suits that arose after the bankruptcy were still allowed to continue, along with claims that the mass recalls caused owners car values to fall dramatically. General Motors has reportedly set aside $400 million to compensate owners for ignition switch defect claims.

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