GM maintains that it is not liable for non-accident claims related to cars made before it used billions of taxpayer money to restructure its way out of bankruptcy in 2009. Since almost all of the cars involved in the recall were made before then, GM has asked the bankruptcy court to confirm this lack of liability and block these lawsuits from moving forward.
However, the plaintiffs contend that GM’s post-bankruptcy failure to act on the known defect means that the “New GM” is still liable. The company is also accused of misleading the court by not disclosing the defect — which it first learned about in 2001 — during the restructuring process.
GM is stil liable for any accident-related claims; it is only trying to preempt lawsuits related to non-injury claims like loss of value and fraud.
According to Bloomberg, GM has asked the plaintiffs in these cases to agree to suspend their lawsuits within 10 days. Lawsuits in Texas and California have already been put on hold by courts in those states pending a decision by the bankruptcy court.
GM believes that those plaintiffs who don’t agree to pause their lawsuits should be required to explain to the bankruptcy court in writing before May 25 why they shouldn’t be required to back off.