GM Begs Bankruptcy Court

It is no secret that General Motors is in some hot water over the recent recall for faulty ignition switches. After allegations that GM knew about the problem long before their 2009 bankruptcy trial, the company now  must beg the court to uphold an order dividing up lawsuits.

The Hot Seat

A  motion filed in Texas bankruptcy court this week was intended to ask the federal bankruptcy judge to shield the company from lawsuit claims of accidents that  occurred prior to their Chapter 11 case in 2009. During their prior case, GM was granted immunity from lawsuits that hold dates earlier than their filing; stating those cases were to be resolved by the old company, Motors Liquidation Co.

Now that new information has surfaced indicating that GM did have prior knowledge of the switch problem before their bankruptcy, the company could face fraud charges and be held liable for the lawsuits dating before 2009. There have been more than 30 lawsuits filed against GM since the recalls started this past February. The filing of this motion is controversial and many are concerned GM is simply trying to dodge liability for victim’s compensation. So far there has been no final ruling and many see GM’s chances as a “long shot”.