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GM not liable in pre-bankruptcy ignition switch lawsuits

By many accounts, 2014 was the year of the recall; especially considering how many General Motors vehicles were affected by the ignition switch recall. As more information about this defect has been discovered, it has been found that GM allegedly concealed it as far back as 2009. Because of this, hundreds of lawsuits have been filed against the company seeking compensation for injuries and other damages suffered in accidents caused by the defect.

However, a federal judge recent determined that General Motors would not be liable to claims asserted before the company emerged from bankruptcy in July 2009. Essentially, the court ruled that the “new” General Motors bought the assets from the “old” General Motors free and clear of any legal liabilities, which meant that the lawsuits against the old company would not be allowed to continue as they were discharged. 

Nevertheless, the court ruled that claims against the company for the lost value of vehicles stemming from mass recalls would be allowed to continue. According to legal experts, the ruling saves the company from being liable for $7 to $10 billion in potential damages payouts. Indeed, those who had been injured by ignition switch defect crashes before the bankruptcy was finalized are disappointed and believe that they will never receive justice.

In the meantime, GM is still liable for claims stemming from crashes that occurred after it emerged from bankruptcy. An ABC report indicates that the company has set aside $400 million to compensate people injured or killed in accidents caused by the ignition switch defect. 

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