General Motors Protected from Wrongful Death Lawsuits Due to Faulty Ignition Switch Defects
On Wednesday, April 15th, a federal judge ruled that the 2009 bankruptcy verdict in which GM received federal funds to restructure the company will protect the automotive manufacturer from wrongful death and personal injury lawsuits claiming that the company negligently failed to issue an appropriate vehicle recall for older model cars with ignition switch defects.
In 2009, bankruptcy proceedings split GM into “old GM” – before the bankruptcy filings concluded – and “new GM,” which restructured and officially formed after the company received federal dollars to make it solvent again. Part of the proceeding involved claiming that there were no major safety issues or defects that could lead to a major recall. The company’s bankruptcy attorneys said no, despite the fact that a recent Congressional hearing revealed that at least 24 people who worked for “old GM” knew about the ignition switch defect, found mainly in 2004-2005 model vehicles.
In New York this past week, Judge Robert Gerber, who handled GM’s bankruptcy case, ruled that the company was protected by provisions in that 2009 ruling against wrongful death lawsuits such as the major ignition switch class action. He did state that plaintiffs who have lost value on their GM vehicles can still sue the company, but only for actions that occurred after 2009, when “new GM” was formed.
The outcry over the delayed vehicle recalls began in February 2014, when GM tried to quietly issue a vehicle recall for around 250,000 cars, trucks, and SUVs from model year 2004-2005. In the vehicle recall statement, the company acknowledged that it knew about at least 13 wrongful deaths caused by car accidents due to the ignition switch problem beginning in 2004. The public began to question why the vehicle recall, caused by such a deadly problem, had been delayed so long, and GM eventually faced a Congressional hearing on the matter, as well as a huge fine from the National Highway Traffic Safety Administration (NHTSA), which is supposed to oversee complaints about vehicle accidents and spur vehicle recalls for safety problems.
In response to the massive outcry, GM created a compensation fund for victims of the ignition switches, and has so far acknowledged and paid claims for 49 wrongful deaths and 121 personal injuries. The company has acknowledged that there were at least 84 wrongful deaths due to ignition switch defect accidents.
“Hundreds of victims and their families will go to bed tonight forever deprived of justice,” said a GM victim’s attorney regarding the judge’s ruling. “GM, bathing in billions, may now turn its back on the dead and injured, worry free.”
Another plaintiff’s attorney, however, is arguing that victims of the faulty ignition switches may still be able to find justice, even with “old GM” and “new GM” being legally separate and protected entities. “We believe that new GM’s misconduct was in fact present in the sale of millions of defective vehicles – a truth that we believe new GM knew and chose to conceal,” he said.
The Strom Law Firm Helps Victims of GM’s Ignition Switch Defect Vehicle Recall
If you have suffered personal injury, or a loved one has died, due to the faulty ignition switch defect in an older model GM vehicle, which is now under vehicle recall, you could be eligible to file a personal injury or wrongful death lawsuit. The South Carolina defective products attorneys at the Strom Law Firm can help you join the GM ignition switch defect class action lawsuit, or discuss other personal injury proceedings. We offer a free case evaluation to discuss the car accident, so contact us today for help. 803.252.4800