Bankruptcy Judge Clears the Way for Non-Ignition Switch Claims to Move Forward Against General Motors
Consumer-rights law firm comments on court’s decision
NEW YORK – In a ruling issued today, U.S. Bankruptcy Judge Martin Glenn, overseeing the bankruptcy case involving General Motors Corporation (“Old GM”), cleared the way for the claims of “non-ignition switch plaintiffs” to proceed against General Motors LLC (NYSE: GM) unencumbered by the bankruptcy court’s prior “sale order” barring claims against GM, according to Hagens Berman.
In June 2009, the bankruptcy court issued the “sale order,” which, among other things, blocked certain legal claims based on Old GM conduct from proceeding against the newly formed GM. Subsequently in April 2015, the bankruptcy court ruled that claims based on GM’s conduct and brought on behalf of certain “ignition switch plaintiffs” for “serious defects in ignition switches that had been installed in” certain Old GM vehicles were not barred by the sale order, because those plaintiffs were prejudiced by not receiving notice of their claims in the bankruptcy proceeding.
But the court left for another day a decision on whether the sale order barred claims brought by “non-ignition switch plaintiffs” for GM’s own post-bankruptcy conduct. That day has come. Today, the court held that non-ignition switch plaintiffs could pursue “independent claims” against GM based solely on GM’s wrongful conduct.
According to attorneys, the decision increases GM’s potential exposure to economic loss claims in class actions and other cases now pending in U.S. District Court before Judge Jesse M. Furman of the Southern District of New York.
“We are very pleased that the bankruptcy court has cleared the way for the district court to evaluate the claims of millions of non-ignition switch plaintiffs seeking recovery for damages associated with GM’s sale of knowingly defective cars and its failure to timely recall the vehicles,” said Steve Berman, managing partner of Hagens Berman and co-lead counsel representing GM vehicle owners in the suit.
“GM’s unprecedented recall of more than 27 million vehicles, coupled with revelations that GM had a broken safety culture, caused GM owners—who did nothing wrong—to suffer massive losses,” Berman said. “Today’s decision means that millions of claims involving other ignition switch defects, power steering defects and defects in side impact airbag systems can be heard in the district court, unencumbered by the 2009 sale order.”
Hagens Berman was appointed co-lead counsel representing owners of GM vehicles in the litigation, which arises from a barrage of safety defects and bungled recalls from GM that irrevocably damaged GM vehicle owners, according to the firm.
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