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Thursday, 24 April 2014

GM owners claim bankruptcy fraud to keep recall suits alive

In the latest of many twists in the American ignition switch scandal, Automotive News reports (subscription required to read more than the headline) that 'GM's request for court protection from 50 car-owner lawsuits seeking compensation for millions of recalled autos with defective ignition switches [has been] attacked as legally “unsupportable.”' Reuters explains in greater detail, if you feel the need to know more.

The short version is that GM has filed a motion in the Bankruptcy Court for the Southern District of New York (where it seems plaintiffs have also filed a class action claim to forestall this tactic: I am not sure which came first, and it doesn't seem to matter very much for the purpose of this posting), seeking protection against claims that date from before its 2009 bankruptcy and eventual re-emergence as 'new GM'. In other words, they argue that the plaintiffs' claims are against the defunct old company not the new one. That certainly has logic to it, but it doesn't strike me as an attractive argument. Still, when did lawyers ever worry about the aesthetics of the cases they plead?

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