Most people know that General Motors was brought back to life after the financial crisis of 2008 by government intervention. It wasn’t long, however, before the revived company had a major problem in the form of a faulty ignition switch in certain model cars. The defective switches caused hundreds if not thousands of accidents, resulting in multiple injuries and deaths. GM ultimately recalled 2.6 million vehicles.
One of the sadder things about this situation is that GM knew of the problem for nearly 13 years before issuing a recall. During that time, people were crashing their cars, unaware that the defective switches were a contributing cause. People were even prosecuted and jailed for causing deaths, when the real cause was GM’s defective ignition switch.
A lot of legal wrangling has taken place as lawsuits were filed across the country. Complicating matters is that GM’s emergence from bankruptcy occurred just about smack dab in the middle of the period during which GM was bungling the ignition switch issue. It was only after the revived version of GM, known as “New GM,” came into existence that the public became aware of the faulty switches. And that complicated matters for people who had been in wrecks before the bankruptcy but did not know the switches could have been the cause. New GM has been trying to avoid liability for these crashes.
There is still hope, however, that victims of these pre-bankruptcy crashes can still bring a claim. A case is now pending before the U.S. Supreme Court that would prevent New GM from claiming that the bankruptcy agreement shields it from successor liability. The theory is that crashes before the bankruptcy were the responsibility of old GM, and that New GM did not assume any of Old GM’s liabilities except those specifically stated in the bankruptcy agreement.
Another set of lawsuits against GM is by people who did not experience a malfunction of the switch, but whose vehicles have become devalued by the switch recall, given its widespread notoriety. A leading case is pending in the U.S. District Court for the Southern District of New York. Whichever way it goes, this one will no doubt work its way through the federal appeal process.
If you or a loved one has been injured in an accident involving one of these recalled vehicles, it’s not too late to seek compensation. Contact the Alexander Law Group, LLP online, or call 888.777.1776. We are in the business of holding people and companies responsible for actions that harm others.