General Motors, which this year alone broke all previous recall records for the North American auto industry, is now facing a huge threat: a would-be $10 billion class action suit on behalf of clients who lost value on their cars.
Steve Berman, one of the plaintiffs’ lawyers, said that the upcoming lawsuit concentrates on owners who purchased or leased a car between July 2009 and July 2014 – but they need to still have it or to have sold it after mid-February when the recalls started. Eligible are also owners who had an accident and destroyed the car after that date. That means at least 20 million GM buyers could join the suit.
The complaint, filed on October 14 in federal court in Manhattan against “New GM,” (the carmaker that emerged from the 2009 bankruptcy process), claims the automaker made the car lose value by concealing more than 60 grave defects in about 27 million vehicles sold just in the United States.
The new class action suit has nothing to do with other, separate class actions against GM filed by individuals in car-price complaints or focused on the defective ignition switches that triggered GM’s recall debacle. On the latter, the company and plaintiffs await for a bankruptcy judge to rule whether the GM that exists today can be held accountable or the “old” GM needs to handle the issue. Naturally, if the judge rules in favor of the automaker, the plaintiffs would need to deal with a company that has just a fraction of the assets General Motors holds today.