General Motors: We Shouldn't be Liable For 'Old GM' Problems

Nov 06, 2014 02:00 PM EST | Matt Mercuro

General Motors said in a court filing this week that it shouldn't have to face lawsuits based on safety concerns in vehicles made before its 2009 bankruptcy, which would include a faulty ignition switch that led to the recall of 2.6 million vehicles earlier this year.

The brief, which was filed in Manhattan bankruptcy court, lays out the automaker's legal arguments and is the opening salvo in litigation from GM drivers who say the company should make them whole for losses related to 2014 recalls.

The switch recalls, which started back in February, have grown to encompass a number of problems affecting millions of vehicles.

GM has faces some 130 different lawsuits over accidents and lost vehicle value, according to Reuters.

This spring, GM asked Judge Robert Gerber of the U.S. Bankruptcy Court in Manhattan, who oversaw the bankruptcy, to bar claims related to vehicles made before 2009. They based the terms on the sale order that created the so-called "New GM."

Older vehicle liabilities were mainly retained by a shell company now referred to as "Old GM." 

Lawyers for the plaintiffs' have asked Gerber to rule that bankruptcy protection does not apply since their clients were not informed about the problems at the time and didn't have a chance to argue their cases during the proceedings.

GM said on Wednesday that plaintiffs' lawyers were just attempting to re-litigate issues that had been aired fully and settled in 2009.

The brief said the plaintiffs "resurrect the same failed arguments as the creditors before them made in seeking payments from New GM for Old GM's liabilities," according to Reuters.

The dispute is split up into four "threshold" issues that Gerber decided should be handled at the outset of the case.

Steve Berman, the lead lawyer for the plaintiffs, said in an email that the filing was expected.

"I say bring it, we will beat it," he said, according to Reuters.

Plaintiffs' response is due on Dec. 16. Gerber has scheduled a hearing for Jan. 26.

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