GM Will Take on Product Liability After Bankruptcy, WSJ Says

June 28 (Bloomberg) -- General Motors Corp. agreed to take legal responsibility for injuries sustained because of vehicle defects after it emerges from bankruptcy protection, the Wall Street Journal reported, citing a court filing.

The decision means GM car owners will be able to take legal action against the government-owned U.S. automaker for product faults, the report said. GM earlier planned to disclaim such liability after selling its “good” assets to the new entity, the newspaper said yesterday on its Web site.

GM said it would take responsibility for product liability claims after the new company is formed regardless of when the cars were bought, the paper reported.

The decision was a partial victory for more than a dozen state attorney generals and some consumer advocacy groups, which were concerned about the legal rights of future accident victims, the report said.

Anyone with pending lawsuits or who won damages against GM prior to the bankruptcy won’t be able to bring claims against the new company, according to the report. Those cases would remain with other unsecured creditors making claims against the old GM, the report said.

A Bloomberg telephone call to GM headquarters late yesterday was answered by a recorded message to call back during regular business hours.

To contact the reporter on this story: Patricia Lui in Singapore at plui4@bloomberg.net