GM depends on a bankruptcy judge – again image

Back in 2009, a New York bankruptcy Judge named Robert Gerber was overseeing what is now the historic bankruptcy transition of General Motors, which saved the company and established it as a “new” one.

Without too many details, what really interests us in this particular case is that Judge Gerber also put in place a shield for the new company, which allows it to deny many of the liabilities of its “old” GM.

Now, that shield comes into question, as thousands of drivers are suing the “new” GM in relation to the scandalous handling of the late February recall that now encompasses 2.6 million cars equipped with a defective ignition switch.

And – ironically – the same Judge now must decide whether to lift it and allow GM to assume the liability. General Motors asked for the so-called bankruptcy shield to be enforced, seeking to shed financial claims (accidents with injuries and deaths would be treated separately).

According to most legal experts, GM has the upper hand here, believing the shield to be virtually unbreakable – since it was a key aspect in the 2009 sales. But, the plaintiffs seem committed to demonstrating that GM intentionally hid the truth – as evidence has already surfaced that at least some of its employees were aware of the problems with the switch – according to rumors ever since 2001.

Via Reuters