Bloomberg Politics (4/24, Stohr, Butters, 201K) reports that the Supreme Court on Monday “cleared the way for General Motors Co. to potentially face billions of dollars in legal claims over a deadly ignition-switch defect, turning away the carmaker’s appeal in a clash connected to its 2009 bankruptcy sale.” The court “left intact a federal appeals court ruling that said the bankruptcy accord didn’t block GM from lawsuits over accidents that happened before the sale or claims that the flaw caused vehicles to lose value.” Bloomberg adds that “plaintiffs’ lawyers have estimated that claims against the company may total as much as $10 billion.”
The New York Times (4/24, Boudette, Subscription Publication, 13.9M) reports that “over the last few years General Motors has paid out more than $2 billion in fines, penalties and settlements related to faulty ignition switches that plagued many of its vehicles for close to a decade, a flaw that led to vast recalls and at least 124 deaths,” but the automaker “may now face years of additional litigation as a result of the latest legal turn in the case.” The Supreme Court “declined to review a lower-court ruling that the company was liable for claims for deaths or injuries arising before it filed for bankruptcy in 2009.” The Times adds that “the compensation fund that G.M. set up made payments to more than 100 such claimants, but a bankruptcy filing typically wipes out past liability, and G.M. had argued that point in court.”
The Detroit Free Press (4/24, Snavely, 1.01M) reports that Monday’s decision “may expose the new GM to new liabilities for a defect that killed at least 124 people and injured 275 in small cars made by the old GM, such as the Chevrolet Cobalt and Saturn Ion” and “gives new life to hundreds of lawsuits from potential victims, including some who refused to accept settlements and instead took their chances in court.” The ruling “also gives life to lawsuits from those GM refused to offer deals to and to class-actions by consumers who claim their vehicle values fell because of the scandal.”
Reuters reports that GM spokesman Jim Cain “said in a statement the denial of the appeal ‘was not a decision on the merits, and it’s likely that the issues we raised will have to be addressed in the future in other venues because the Second Circuit’s decision departed substantially from well-settled bankruptcy law.’” The Wall Street Journal (4/24, Stech, Spector, Subscription Publication, 6.37M) also reports.
Story provided by AAJ.
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