Old vs. New: Shouldn’t GM Still be Held Responsible?

Faulty ignition switches installed in 2.6 million vehicles manufactured by General Motors have claimed at least 111 lives now approved for payments from GM’s Compensation Fund. The approval of these additional fatality claims comes on the heels of U.S. Bankruptcy Judge Robert Gerber’s decision late in May 2015 agreeing to stay dozens of GM lawsuits related to the defective switches installed in older model GM vehicles. The decision is the latest in the years-long GM bankruptcy saga, where, in 2009, courts allowed GM to come out of bankruptcy when it expunged the manufacturer of its “Old GM” liabilities. In April 2015, it was ruled that these protections would prohibit most GM owners from suing the “New GM” for their defective ignition switches. An appeal of this decision has been filed. Judge Gerber reacted by granting the stays rather than orders of outright dismissal of claims since it may be less “cumbersome” if his order blocking the suits is successfully overturned.

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