Will the `New' GM Be Liable for the `Old' GM?

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May 5 (Bloomberg) -- Two law firms suing General Motors over alleged wrongful deaths and injuries stemming from ignition switch defects said they have joined forces in the litigation. Barclays' Brian Johnson and Bloomberg's Bill Rochelle have more on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Do people have any recourse to go after the old bankrupt gm?

Are they responsible for what happened?

Unless they can prove something to the bankruptcy judge.

First, you have to get beyond having a claim against the law old gm which may not be worth anything.

That went out the door in 2009. the first thing they have to do is establish they have a claim at all.

Bankruptcy wipes out claims.

It may not be so terribly difficult, because bankruptcy law for about 100 years has said if a bankrupt company or individual knows somebody has a claim and do not tell them they have a claim, then that claim rides through the bankruptcy.

Aha.

That alone plus a dollar and a half will not get you on the new york subway.

If you have a claim against gm and they did not tell you you had a defective auto, you have the claim against all gm.

You do not have a claim against new gm.

So, it can ride through bankruptcy?

It does, but so what?

That just gives you a claim against the old gm, the company that don't got any assets anymore.

The other effort you have to undertake, is to transfer this claim to the new gm.

There are several ways to do it.

Prove that new gm is the successor to all gm.

Isn't it?

It has the same employees, the same company -- maybe yes, maybe not.

It may invoke a question of perhaps, 50 different states' laws as to what is and what is not.

It all over the place document say the new gm is not the successor to old gm.

Assuming, brian johnson, you can go after new gm for old gm's problems, what would that do to the company?

We have taken what we hope is a conservative estimate of the damages, around $2 billion to $3 billion, around wrongful death lawsuits.

These so-called economic loss lawsuits.

You know, for a company with over $30 billion of cash, where the market value is down by far more than $3 billion, we think that is a risk investors should be willing to take.

It almost does that matter.

These big cases are decided by the court of public opinion.

The people who were injured or suffered losses due to the ignition problems, they are going to be paid so much they do not have to work for the rest of their lives, guaranteed.

The people who did not have serious injuries, they may get a little money, maybe not.

You don't think it is going to matter to the company?

Do you think it is going to matter to the company?

If you get to a jury for economic damages, and if a jury or juries leaves there could be egregious fraud, who knows?

There could be large punitive damages.

Does that kill gm?

I don't think so.

I will agree, too, matt is right.

You are going to get the money out of gm -- but they will survive this?

It is not the end of gm, no.

This could put the banks out of business.

Could this put gm out of business?

It does not seem any of you think so?

No, i don't think anybody is putting the banks out of business.

The government will find a way.

It would be a weird twist of irony if the government did everything it could to save his company and it ends up getting plates with all of these fines and not being able to exist come and now that we have an incentive to keep it around.

What is the next step?

Final word to you.

The bankruptcy judge has to say how far these people can go.

First, can they get out of bankruptcy work with a claim that is worth more than peanuts.

The important thing we bankruptcy judge can do is decide if he wants to open the floodgates for an investigation.

That is not good for gm if he does because they will trot a lot of perhaps 30 laundry out -- trish, can i say something for your show tomorrow?

In day.

I am going to detroit tonight.fiat is going to unveil their new plant.

I can't wait.

I cannot wait to have out, romeo -- alfa romeo there.

This text has been automatically generated. It may not be 100% accurate.

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