Bankruptcy judge to review GM recall dispute today image

GM is facing an ardent legal battle from customers who claim compensation over the lost value of their recalled cars, who had flaws hidden by GM during the 2009 bankruptcy reorganization.

GM was found to have been knowing about a defective ignition switch as far back as at least a decade before it issued this year the famous 2.6 million cars ignition switch recall. The company, without claiming protection from the victims of deaths and injuries stemming from the flaw, asked US Bankruptcy Judge Robert Gerber – the same one who took the company through the bankruptcy process in 2009 – to enforce the limits he set back then, which allowed the “new” company to shed liability over previous facts.

“Old GM did nothing to let those people know that they had a defective product, didn’t give them notice of the bankruptcy,” previously told the judge one of the plaintiffs lawyers. “Isn’t it the case these individuals were deprived of due process? In that context, should the sale order apply to them?”

The plaintiffs lawyers, with one of them seeking as much as $10 billion for his customers, are expected to plead in a hearing scheduled for today that their cases weren’t presented before the judge in 2009 because GM didn’t allow them to – by keeping the flaw a secret all this time.

Via Bloomberg