GM Says Customers Should Agree to Suspend Ignition Suits

General Motors Co. (GM) told a bankruptcy judge that car owners should agree “voluntarily” within 10 days to suspend 59 lawsuits over ignition-switch defects pending his decision on whether all their demands are allowable.

The lawsuits were already stopped last month by federal judges in Texas and California while GM sought a ruling from U.S. Bankruptcy Judge Robert Gerber in Manhattan on whether the claims were permitted under the terms of the carmaker’s 2009 reorganization. The car owners are seeking as much as $10 billion for the lost value of their vehicles.

Some have asked Gerber for a quick decision on whether they can keep suing on grounds that he won’t consider when he assesses the scope of his court orders in the bankruptcy, which shielded GM from some legal actions.

Customers who don’t agree to the halt that GM is seeking should be required to file papers in court by May 25 explaining why the judge shouldn’t force them to, the Detroit-based carmaker said in a bankruptcy court filing yesterday.

The automaker asked Gerber to put the stay proposal at the top of the agenda for a conference tomorrow on how the case should proceed.

Some GM customers also want permission to immediately seek enough information from the company to ground the 2.59 million cars it has recalled over the faulty ignition switches, which have been linked to 13 deaths.

The bankruptcy is In re Motors Liquidation Co., 09-bk-50026, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net

To contact the editors responsible for this story: Andrew Dunn at adunn8@bloomberg.net Charles Carter

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