Yesterday, Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York issued a ruling that denies plaintiffs the opportunity to bring claims against General Motors for wrongful death and injuries sustained as a result of the now infamous GM ignition switch defects.
In 2014, GM was forced to recall approximately 2.6 million vehicles due to the lethal driving conditions created by its defective ignition switches, including shut down power to the engine and disabled airbags. At least 84 deaths have been linked to these defects.
GM took active steps to conceal its ignition switch problems, depriving affected owners the opportunity to fix their defective vehicles and avoid the potentially lethal consequences. Nonetheless, today's ruling effectively shields General Motors from liability.
"$7-10 billion in claims now off of the GM tab," said Bob Hilliard, Founding Partner at Hilliard Munoz Gonzales, LLP, who currently serves as one of only three Co-Lead Counsel in the national litigation against GM and has primary responsibility for the personal injury and death claims.
The "New General Motors Company" that emerged from bankruptcy had originally agreed to assume responsibility for any accident claims that arose after the company acquired the assets of the "Old General Motors Company," including post-sale deaths, personal injury, and property damage from the GM ignition switch defects.
However, GM now refuses to assume responsibility for the new claims that have been brought against the company. These claims include some 60 class action lawsuits and losses that oscillate between $7 and $10 billion. GM alleged that the terms of the Sale Order blocked any new claims from being brought against it.
Mr. Hilliard states, "The Opinion states that 'pre-sale accident victims were not prejudiced by the denial of due process the Judge found occurred. Respectfully, that is flat wrong. My clients never had their day in Court. They never had an opportunity to appear at the sale hearing when things still mattered and were still unsettled."
"No way GM would have had the protection it now enjoys had it disclosed in 2007-2009 what it finally disclosed in 2014. For GM's lawyers to keep this information locked in their briefcases while the bankruptcy sale hearing was taking place, does truly make them the devil's advocate."
"A not so new day has dawned once again in favor of corporate America whose goal it is to dodge responsibility for killing and maiming hundreds of young Americans. But for the fact it recalculates evil's depths, GM's business plan was perfect, and now has a Judicial seal of approval: During bankruptcy, keep critical facts about this defect and the deaths secret especially from the Judge, actively and intentionally cover up the truth about killing hundreds of kids with your defective ignition, sell your old company to your new company, and then and only then: come clean. Fall on your sword, parade a new apologetic CEO in front of the cameras and remorsefully take responsibility BUT always blame it on your old company. Then watch 10 billion dollars in potential liability vanish. Congratulations GM. Those dead because of your defective ignition switch sleep a little colder tonight—their families deprived of the dignity and honor Justice and our judicial system were meant to provide. Your judicial protection now becomes their permanent purgatory."
"This ruling padlocks the courthouse doors," said Bob Hilliard. "Hundreds of victims and their families will go to bed tonight forever deprived of justice. GM bathing in billions may now turn its back on the dead and injured worry free."
Hilliard says "One of my clients who lost his pregnant wife summed it up this way when told of the ruling: 'I can totally understand on a normal bankruptcy but when GM deliberately committed fraud and knowingly murdered innocent people destroying the lives of so many, that is just a straight up unethical violation of rights.'"
Hilliard says "It is sure hard to explain to regular folks who aren't lawyers and who lost loved ones how this could be."