GM Asks Judge to Affirm Freedom From Liabilities
General Motors Co. (GM), which is fighting at least 37 lawsuits over faulty ignition switches, asked a bankruptcy judge to reaffirm a 2009 order freeing the automaker from most of its predecessor’s liabilities.
The judge’s order left GM with some warranty obligations and responsibility for accidents occurring after it reorganized, the company said in a filing in U.S. Bankruptcy Court in Manhattan yesterday. That order should now be enforced to clarify that GM cannot be sued for economic losses on an old GM vehicle, according to the filing.
“Those types of claims were never assumed by New GM and are barred by the court’s sale order and injunction,” the company said. “New GM cannot be held liable for old GM’s alleged conduct, either directly or as old GM’s alleged ‘successor.’”
Economic losses include a decline in the vehicle’s value and loss of use or wages for time spent getting it repaired. GM said its request doesn’t address any lawsuits over accidents causing personal injury, loss of life or property damage, nor its obligation to repair the defective ignition switches, which have been linked to 13 deaths.
The Detroit-based company has begun repairs, offering free rentals to customers who take their cars to dealers. GM previously asked federal judges in California and Texas to delay litigation over defects in 2.59 million cars it recalled until the bankruptcy judge rules on whether some compensation claims can be brought without violating the 2009 order.
The company’s reorganization was aided by the U.S., which bought stock in new GM to allow it to emerge stronger from bankruptcy court.
Last week, GM defeated a consumer bid for a court order requiring the company to tell owners of recalled vehicles to stop driving their cars until the defect is fixed.
The case is In re Motors Liquidation Co., 09-bk-50026, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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