'New GM' Could Still Be on the Hook for $10 Billion in Damages

Feb 17, 2015 05:30 PM EST | Jordan Ecarma


"New GM" could be paying for some old company problems if a New York judge rules this week that General Motors is responsible for vehicles built before its 2009 bankruptcy.

Lawyers who claim to represent 27 million GM customers who own recalled cars are looking to bring a $10 billion lawsuit against the automaker, and U.S. Bankruptcy Judge Robert Gerber will rule this week whether or not GM is culpable for the mistakes of "old GM," Bloomberg reported.

Back during GM's 2009 bankruptcy restructuring, Gerber ruled that the post-bankruptcy GM wouldn't be responsible for its old vehicles, and GM has requested that his ruling stand as a shield against such lawsuits. 

Gerber will examine whether or not GM has been in violation of bankruptcy law, which would require the automaker to inform potential plaintiffs if they have a right to make an objection in court.

Lawyers representing GM customers say that because Chevrolet Cobalt and Saturn Ion drivers didn't know they could make a claim, they should be free to sue "new GM" for the mistakes of the old.

"If I'd shown up in court and said GM knew of the safety defect, and has known for the better part of seven years without telling anyone, resulting in numerous deaths, injuries and depreciation of value, who knows what Gerber might have said?" asked lawyer Ed Weisfelner, as quoted by Bloomberg.

For its part, GM says that because the faulty ignition switches were not known to be a "persistent" problem, the company was not responsible for sending claim notices to individual customers.

Owners initially wanted to accuse GM of something far more dastardly--intentionally concealing responsibility for the faulty switches, which have been connected with at least 56 deaths. But lawyers representing customers stood down when Gerber requested an example of a leading GM executive who had deliberately withheld information about the switches in court.

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