Is the New GM Liable for the Old GM?

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May 23 (Bloomberg) -- Tripp Scott Director Chuck Tatelbaum discusses General Motors' recall troubles and legal claims with Trish Regan and Matt Miller on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Is it free of any liability here or is this company one that can be taken down?

I think you have two questions there.

It is up to the judges whether they are free from the liability.

But based on historical cases, they may have a good chance at being free from the liability.

If they are, will it take it down?

I think gm is taking a real risk here because if they lose, then the court of public opinion and juries are not going to be sympathetic to them.

The court of public opinion is the image for this entire company.

Are you going to want to buy a car when it/ a company is trying to shield itself from bankruptcy because of the recall they allegedly knew about?

If they can prove management did not know about the problems during the bankruptcy or after the bankruptcy, it can be shielded from the economic losses lawsuits.

The case of the actual injuries or deaths resulting in a handful or dozen or so cases that it surely will settle regardless of any shield of liability is a different story.

Hyper aircraft went into bankruptcy a few years ago and others dealt with these future claimants.

It is interesting that gm did not.

It will be interesting, even more, if the directors knew about it and hit it to the bankruptcy.

Bad news for the company either way you look at it.

What happens if they win?

Who is going to like that?

For a company that has to deal with consumer happiness, i'm not sure it's the best strategic move.

They have to say that they didn't know about this.

If they did know about it, then they are in much deeper hot water than just economic lawsuits.

There'll be lots of due diligence in the process.

And that is one of the big questions.

How can the new ceo not know that any of this was going on?

How did she not know and how can you be so senior in management and not know?

The other issue is the bankruptcy plan is to shield the directors from liability.

Gm make it out but the directors may be held in.

Thank you so much.

Coming up next, speaking with

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