GM filed suit last night for protection against a wave of lawsuits following its recent recalls. The company filed for protection in a New York bankruptcy court, claiming that it faces legal claims related to cars with faulty ignition switches and power steering. GM wants to avoid any lawsuits arising out of actions that it took prior to its 2009 bankruptcy.
The plaintiff's lawyers say that the company should not be protected by the bankruptcy because it concealed its product defects during the bankruptcy. Some suspect this is part of a strategy aimed at forcing individuals to settle lawsuits.
Late last month, GM recalled 2.6 million vehicles that have ignition switches that can cause the vehicles to lose power. The ignition switch issues have been linked to many injuries and about a dozen deaths.
ABC News reports that General Motors attorneys are making the argument that the company’s 2009 bankruptcy split the company into “New GM” which was given all of the company’s assets, and “Old GM” which inherited all of the company’s debts and liabilities.
The attorneys claim that the cars were manufactured by Old GM and therefore aren’t the problem of the new company. The idea of New vs. Old GM was severely panned by Saturday Night Live’s reenactment of GM CEO Mary Barra’s Senate testimony.
GM is hoping for the dismissal of about 50 class-action lawsuits for damage surrounding lost car values.