Most crashes and deaths related to faulty ignition switches in GM-made vehicles that occurred before the automaker's 2009 bankruptcy won't be held against it, according to a court ruling announced on Wednesday.
The decision by U.S. Bankruptcy Judge Robert Gerber means that GM may avoid potentially billions of dollars in liability, as well as the cost of defending those lawsuits.
The plaintiffs will have to file their claims against the financially strapped “Old GM,” the shell company comprised of bad assets GM shed in bankruptcy. Meanwhile, economic-loss plaintiffs can still bring claims against “New GM” based solely on its post-bankruptcy conduct.
As you know, GM recalled 2.6 million vehicles with the faulty switch last year. The defect was linked to nearly 160 injuries and 84 deaths.
A GM spokesman, Jim Cain, said that Gerber properly concluded that claims based on old GM's conduct were barred and that the plaintiffs still had to prove the merits of their claims against new GM.