Adler Law Group, LLC
Phone: 860-333-5797 | Toll Free: 800-693-9147

GM bankruptcy still a shadow over ignition switch claims

General Motors reportedly has already paid out $2 billion in penalties and settlements related to those defective ignition switches. Connecticut readers are surely aware of the one's we're talking about.

Several million vehicles have been recalled to replace defective ignitions that can suddenly turn off. When it happens, the engine can stall causing power outages to brakes, steering and even air bags. Obviously, that's a combination that has led to some serious and deadly car accidents.

The issue of the company alleged liability is getting an airing in a federal court in New York starting this week. In one sense it's a do-over. The first trial last month ended suddenly after allegations were raised that the plaintiff had supplied misleading testimony.

How the case goes could establish the framework for how dozens of more lawsuits might play out later. But what may be of equal significance is a second matter being presented to the 2nd U.S. Circuit Court of Appeals.

In that case, other plaintiffs are asking the court to reverse decisions made by a bankruptcy court that effectively shield GM from liability for any ignition switch issues that predate the 2009 bankruptcy settlement.

The argument of the attorney for the plaintiffs is that GM knew about the ignition switch problems long before it sought bankruptcy protection and kept the information from consumers. He says government didn't know about the problem until after the bankruptcy. But if it had, he says either recalls would have started a lot sooner or terms of the bankruptcy would have been different.

The attorney estimates that if his request is granted, it could cost GM as much as $10 billion more to settle the additional claims.

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