General Motors seeks protection from legal claims for pre-2009 conduct
General Motors has revealed in court filings that it will soon ask a judge to shield the company from legal claims for conduct before its 2009 bankruptcy.
The carmaker's strategy is in a motion filed for a federal court in Corpus Christi, Texas, and in other cases across the US that involve the defective ignition switches that have led GM to recall 2.6 million small cars.
The motion asks District Judge Nelva Gonzales Ramos to delay action on the lawsuit until the bankruptcy court rules and other federal courts decide if the case should be combined with other lawsuits. But GM says it's not asking to halt action on a motion to force GM to tell customers not to drive their cars that are being recalled.
GM has said at least 13 deaths have been linked to the switch problem. The switch can unexpectedly slip out of the "run" position, shutting down the engine, knocking out power-assisted steering and power brakes, and disabling the air bags. GM admits knowing about the problem for at least a decade, but it didn't start recalling the cars, including Chevrolet Cobalts and Saturn Ions, until February. The firm's motion says GM will ask the bankruptcy court in New York to enforce an order made during the 2009 bankruptcy case that split GM into a new company and an old company. Claims from before the bankruptcy would go to "Old GM", called Motors Liquidation, while claims after the bankruptcy would go to the new General Motors.
"Just like the other 'ignition switch actions' that other plaintiffs have filed in the wake of public reports regarding the outstanding recall, this case relates to a vehicle designed, manufactured, originally sold and advertised by Old GM," the company's motion says.
GM's motion says more than 30 cases have been filed against the company since February.
With the motion, GM is trying to limit its legal liability in the cases while at the same time it considers compensation for families of crash victims.
Attorney Robert Hilliard filed the Texas lawsuit on behalf of Charles and Grace Silvas. It claims they are stuck with a defective 2006 Chevrolet Cobalt and seeks repairs, compensation for loss of value and alternative transportation. Hilliard said GM's motion to send the case to the bankruptcy court was a "long shot".
GM has said owners can continue safely using the cars if precautions are taken.