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“Old” GM Says “New” GM Should Pay for Faulty Vehicles
The trust that pays creditors of "old" General Motors says "new" GM should compensate customers for lost resale value due to the recall of 2.6 million cars with defective ignition switches.
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The trust that pays creditors of "old" General Motors says "new" GM should compensate customers for lost resale value due to the recall of 2.6 million cars with defective ignition switches.
Consumers are seeking $10 billion in compensation. They claim new GM should pay them. New GM argues that the terms of its 2009 restructuring specifically shield it from liability claims involving vehicles made by the former company.
In a filing with the court, old GM trust says such protection doesn't apply to the ignition switches because the company deliberately concealed the problem from the public and the court. It says the shield doesn't apply to owners who were not notified about the defect at the time and thus did not seek compensation.
Bloomberg News notes that about 130 lawsuits against GM over diminished value have been combined in two class-action lawsuits in New York City. GM's ignition switch recall in February spawned 79 more callbacks to fix various defects in 30.4 million vehicles worldwide roughly half of them built by old GM.
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