Plaintiffs suing the company also filed a proposed class action
lawsuit in Manhattan bankruptcy court on Monday, seeking an order
declaring that GM cannot use the bankruptcy protection to absolve
itself from liabilities.
The faulty ignition switch has been linked to at least 13 deaths and
the recall of 2.6 million GM vehicles.
GM emerged from bankruptcy protection in 2009 as a different legal
entity from the so-called old GM. Under those terms, the "new GM"
shed liability for incidents predating its exit from bankruptcy, and
any lawsuit involving pre-bankruptcy issues must be brought against
what remains of old GM.
"New GM's recall covenant does not create a basis for the plaintiffs
to sue new GM for economic damages relating to a vehicle or part
sold by old GM," the company said in a filing on Monday in the
Bankruptcy Court for the Southern District of New York.
The motion did not address claims stemming from accidents, including
personal injury and wrongful death. GM has said it is committed to
replacing the defective switches in cars.
"GM has taken responsibility for its actions and will keep doing
so," spokesman Jim Cain said in an emailed statement.
The company recognizes its "civil and legal obligations relating to
injuries" tied to the recall cars, Cain said, adding that GM has
retained lawyer Kenneth Feinberg to advise it of its legal options.
Feinberg is known for his work in administering special payment
funds for high-profile catastrophes like the September 11, 2001
attacks and the BP Plc oil spill.
Late on Tuesday, U.S. Bankruptcy Judge Robert Gerber in New York
issued an order setting a procedural conference for May 2 to
determine how the case should move forward, saying that "no
substantive matters will be decided."
Also on Tuesday, GM said it was restructuring its engineering
operations to improve the quality and safety of its vehicles.
Since it began to recall vehicles in February, GM has been hit by
dozens of lawsuits on behalf of individuals injured or killed in
crashes involving recalled cars, as well as customers who said their
vehicles had lost value as a result of the company's actions.
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The plaintiffs have said they bought or leased vehicles that had the
defective ignition switch and accused GM of fraudulently concealing
its knowledge of the defect. As a result, they said, the company was
not entitled to protection from liability.
"GM's argument suggests that the U.S. Government would have agreed
to extend $40 billion of taxpayer money for GM's restructuring, and
supported shielding it from liability through the sale order, had it
known of GM's intentional misconduct," the plaintiffs said in their
In its filing, GM asked the court to direct the plaintiffs to stop
suing new GM for claims that are barred by the bankruptcy sale order
and the injunction, and to dismiss the earlier claims.
Lawyers for the plaintiffs declined to comment.
Other plaintiffs' lawyers are also joining in. Late on Tuesday
lawyers for plaintiffs filed an objection saying the applicable
bankruptcy court orders on which new GM now bases its request for
protection are unenforceable against the ignition switch claimants.
"GM's filing last night was a pre-emptive attempt to dominate the
discussion about its so-called concern for the damages caused by
defects it has been aware of for nearly ten years," Mark Robinson, a
lawyer for the plaintiffs, said in a statement.
Last week, GM sought a stay on lawsuits involving the ignition
claims until a judicial panel on multidistrict litigation decides on
a motion to consolidate the case with others and the bankruptcy
court rules on whether the claims violate GM's 2009 bankruptcy sale
(Reporting by Supriya Kurane and Arnab Sen in Bangalore;
reporting by Jessica Dye in New York; editing by Lisa Von Ahn,
Gopakumar Warrier, Saumyadeb Chakrabarty and Bernard Orr)
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