GM to Appeals Court: Respect Our Bankruptcy!

Steph Willems
by Steph Willems
gm to appeals court respect our bankruptcy

General Motors hopes to avoid paying up to $10 billion in liabilities by challenging last month’s appeals court ruling in the faulty ignition switch saga.

The automaker wants a rehearing after the court ruled that it couldn’t use its 2009 bankruptcy to block hundreds of crash-related lawsuits, according to the Wall Street Journal.

In July, the U.S. Appeals Court of Manhattan overruled an earlier court decision that protected GM from financial damage from ignition switch-related accidents that took place before 2009. The automaker has already paid out $2 billion in settlements related to the faulty switches, which are linked to 124 deaths. It wants a panel of appeals court judges to decide the matter, and hopefully rule in its favor.

According to GM, last month’s ruling “makes no sense and is flatly contrary to the bankruptcy code and decisions from other courts.” If the decision isn’t overturned, it could damage the entire bankruptcy process, the automaker claimed.

Steve Berman, a plaintiffs’ lawyer, told the WSJ that he “isn’t too worried.” The court’s decision was unanimous, he noted, and it rarely grants requests for a rehearing.

The appeals court claimed GM knew about issues with the ignition switches at the time of bankruptcy, but it waited until early 2014 to make the defect public. That violated the due process rights of its consumers, the court ruled.

Laws are laws, GM asserts. By transitioning into a wholly new corporate entity after the bankruptcy, it washed its hands of the sins of “Old GM.” The automaker said the ruling, as it stands, puts all companies who purchase bankruptcy sale assets in danger.

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  • Jimborambo Jimborambo on Aug 12, 2016

    This case is clear to me. They did it and they knew it. Pay the consequences

    • Lorenzo Lorenzo on Aug 14, 2016

      Have you forgotten North Carolina Attorney Larry Archie's motto? "Just because you did it doesn't mean you're guilty."

  • DenverMike DenverMike on Aug 12, 2016

    GM is simply capitalizing on the old GM/Chevy/Buick/etc, legacy, marque and lineage. It's the legal term know as: "You Can't Have Your Cake And Eat It Too" Had the new owners started over as "Average Motors", changed the name of the Silverado to Desperado, Sierra to Donner Pass, Camaro to Kapado, etc, etc, then I believe they'd have a decent case for an appeal. When you buy-out the dead carcass of "Frank's Kitchen Remodeling", Frank being a known con artist and felon, getting sued several times a year, are you gonna keep old namesake going?? Starting as the new guy in town, a complete unknown doing kitchen remodels, vs a well established company that's spent tons on advertising/PR over the years, has its own downsides. The New GM took the other legal option called: "You Take The Good With The Bad".

  • Art Vandelay Art Vandelay on Aug 13, 2016

    So is GM endorsing The Donald then since he too is skilled at using bankruptcy law to his advantage!