Eight state attorneys general are opposing a provision in General Motors Corporation’s bankruptcy plan that would free the manufacturer from auto product liability lawsuits filed by consumers who have suffered serious personal injuries as a result of defective GM auto products. According to a news report in the Wall Street Journal, attorneys general from Connecticut, Kentucky, Maryland, Minnesota, Missouri, Nebraska, North Dakota and Vermont filed an objection in U.S. Bankruptcy Court contending that GM’s plan to throw these product liability claims out the window would deny injured victims “key legal rights.”
I think, unfortunately, this is going to be a tough, uphill battle for the states because of the precedent set when Chrysler recently emerged from bankruptcy and was freed of these liabilities. Legal precedent also works to the advantage of GM. Most companies are able to secure a lot of leeway coming out of bankruptcy and leave personal injury claims behind in bankruptcy court. However, this case is a lot different with GM having tens of millions of vehicles on our roads.
Consumer advocates and lawyers fear that these defective GM product lawsuits filed by personal injury victims who have no recourse other than the civil justice system, could be inadequately compensated or worse, simply dismissed. GM will essentially get an opportunity to push the “reset” button with their bankruptcy plan. But consumers who were injured as a result of defective products that GM had put on the market will be left with little chance of being compensated or getting any justice.
Under GM’s proposed terms, consumers suffering injuries or death from vehicles currently on the road wouldn’t be able to bring claims against the new GM. Instead they would be left as unsecured creditors seeking claims against GM’s old estate in bankruptcy court where they will more than likely get nothing.
Over the last three decades, the Orange County auto product defect attorneys at Bisnar | Chase have represented numerous injured victims in auto product liability claims against GM. I cannot, for a minute, imagine how these victims could have survived financially or moved on with their lives without the compensation they received from those claims. Many car accident victims who are injured as a result of defective products suffer permanent disabilities that leave them unable to work and earn a living or even do the things they enjoyed doing before. They quality of life is completely destroyed not to mention their ability to feed their families.
For GM to take advantage of their situation, get a generous bail out from the federal government with taxpayer money and then leave the same taxpayers in the lurch without recompense for their damages, in my opinion, is simply unacceptable.