General Motors customers gained a new friend in their run for the compensation worth $10 billion. The automaker’s bankrupt predecessor says that the ignition switch defects were illegally hidden from the GM drivers since 2009.
A trust fund from which the bankrupt company’s creditors get paid asked a judge to put aside the earlier rulings that allowed the now-profitable GM to not pay customers for price drops of older recalled cars.
Now drivers who were denied their rights five years ago are entitled to sue. The trust and its creditors say that the automaker does not have any right to ask a judge to shield it from its clients and that GM has known and been concealing for years the number of cars with defective switches.
GM exited bankruptcy in 2009 by a sale order from the U.S. Bankruptcy Judge Robert Gerber, which used government money to buy its predecessor’s best assets. The automaker based in Detroit advised the customers to sue the bankrupt remnant for the lost worth of cars with malfunctioning switches, but the trust claimed it had little left to pay new requests.
Customers made their first formal claim this week for the ban to be lifted from their 10$ billion suit, which is now pending in another court. The amount of money represents penalties and also covers the price declines of recalled cars.
By Gabriela Florea