GM Must Turn Over Documents Regarding Ignition Switch Defect

(frankieleon)

Since the General Motors ignition switch defect came to light in February there has been no shortage of lawsuits filed against the car manufacturer. While the company hopes that its compensation plan, and previous bankruptcy, will help to shield it from these claims, plaintiffs in these suits received some good news Friday: The company must hand over all documents pertaining to the defect.

According to the Wall Street Journal, a federal judge directed GM to turn over all documentation, including information already submitted to Congress and an internal investigation, to attorneys for the plaintiffs in multiple suits.

The plaintiffs allege, among other things, that GM’s failure to acknowledge the ignition issues have led to and will lead to economic losses, personal injury and deaths.

In a minor victory for GM, the order only pertains to accidents that occurred after the carmaker emerged from bankruptcy as the “New GM” in July 2009. As part of GM’s bankruptcy restructuring, the New GM is not supposed to be liable for any non-fatal accidents that occurred before the bankruptcy.

But even the bankruptcy protection may not always shield GM from liability. U.S. Bankruptcy Court Judge Robert Gerber has been asked to determine whether the company committed fraud during its bankruptcy.

If he rules that GM deliberately chose not to disclose information about the ignition-switch defect, which was first discovered during pre-production testing of the Saturn Ion in 2001, at the bankruptcy, then the shield of protection would be voided, the WSJ reports.

Officials with GM contend that the bankruptcy effectively shields the current company against any litigation connected to accidents or products that occurred before 2009, because executives never knew about the issue.

However, the company has said it would not hide behind the bankruptcy shield when it comes to considering compensation for victims and their families under the Victims’ Compensation Fund.

Judge Tells GM to Open Defect Files [The Wall Street Journal]

by Ashlee Kieler via Consumerist