Automotive Product Liability Claims Against General Motors Will Continue To Stand Even After Bankruptcy

The U.S. government has struck a deal with General Motors (GM) that requires the car manufacturer to assume responsibility for any automobile product liability lawsuits filed after GM emerges from bankruptcy as a new, government-owned company. This requirement even applies to claims regarding vehicles manufactured by the old GM.

This agreement is much better for the general public than GM’s original plan, which would have barred any new product liability lawsuits being filed against the new company. However, lawmakers had a problem with leaving the American public without any legal recourse for personal injuries resulting from car and truck product defects. The deal that resulted in the present requirement resolved this problem that could have stalled GM’s plan for a quick restructuring program.

And while future vehicle product liability claims are protected, it appears that previously filed product liability claims will likely remained tied to the old GM and therefore be tied to its bankruptcy proceedings. Typically, after a company files for bankruptcy the courts and bankruptcy protection allow that company to leave any legal claims behind so that they can emerge from bankruptcy with a clean slate.

This concept can be seen in the Chrysler bankruptcy, where the company was allowed to leave its auto product liability claims with its old car company. For those consumers whose claims are left behind there is generally a slim chance that they will be paid at a later date.

So while the GM deal is good news for consumers that might suffer future injuries from GM automotive product defects, those who are already fighting for compensation might be left unsatisfied.

Kreisman Law Offices has been handling Illinois product liability lawsuits for over 30 years, serving the areas in and around Cook County, including Chicago Heights, Downers Grove, Lombard, and Glenview.