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GM seeks dismissal of ignition switch defect claims

This week, General Motors moved to protect itself from many of the lawsuits that have been filed in the wake of the defective ignition switch crisis.

GM asked the bankruptcy court that approved the company’s 2009 bankruptcy filing to protect it from at least 54 class action lawsuits that have already been filed and any additional claims that may be filed in the future by plaintiffs who seek damages for economic losses such as diminished car value.

However, GM is not trying to protect itself from personal injury lawsuits stemming from serious or fatal car accidents that occurred because of the ignition switch defect. Company officials said they hope to reach out-of-court settlements with accident victims and their families.

At this point, the company has linked the ignition switch defect — which could cause the ignition to switch into the off position while cutting off power to power steering, airbags and other electronic systems — to at least 13 deaths.

Earlier this month, the GM CEO admitted that safety lapses had occurred, resulting in millions of vehicles being recalled more than years after the company first learned of the problem with the ignition switches.

Essentially, this week’s request to the bankruptcy court was already part of the 2009 restructuring agreement, which protected the company from liability arising from incidents that took place before the restructuring agreement was finalized.

Most of the 2.6 million vehicles that were recalled this year for the ignition switch defect were manufactured before 2009, meaning that GM would be protected from economic claims filed by their owners.

It is presumed that GM filed the motion in effort to get all of the claims dismissed at once instead of battling them individually.

However, attorneys for the plaintiffs have already filed a response to the motion, charging that GM should not be protected because it engaged in bankruptcy fraud during the 2009 proceeding.

The plaintiffs’ court filing stated that GM “intentionally and fraudulently concealed the defective ignition switch from the bankruptcy court and parties in interest” and therefore should not be protected by the terms of the restructuring agreement.

It will be up to the bankruptcy court to determine whether fraud occurred.

This case demonstrates how complex personal injury lawsuits can get, especially when several areas of law are involved such as bankruptcy and products liability. For that reason, it’s extremely important to be represented by competent and experienced attorneys.

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