US: GM owners still have a chance to open $10 billion ignition switch lawsuit image

Drivers of older Chevy Cobalts, Saturn Ions and of other models that were affected by the huge string of recalls linked to faulty ignition switches have a new chance this week to spearhead the proposed $10 billion lawsuit against General Motors.

Last February the largest US automaker announced it was recalling 2.6 million cars equipped with defective ignition switches. The ensuing scandal showed the company was at least a decade late with the safety campaign and the carmaker had to shake up its entire quality and safety screening process, consequently recalling millions of other cars for the faulty ignitions. Naturally, numerous customers allied against the automaker – which is still under numerous federal investigations, including a criminal probe – and accused it of endangering them as well as bringing economic loss from lower car prices.

US Bankruptcy Judge Robert Gerber has fallen in the ungraceful position of determining if they can actually demand money for their old, often second-hand, cars. That’s because GM has argued that since emerging from the government-sponsored bankruptcy back in 2009 it has been protected by the so-called bankruptcy shield – most of the liabilities were written off for the period before 2009. Today, the judge is set to open his New York courtroom to lawyers that claim to be representing 27 million drivers of recalled cars, most of them linked to the ignition switches. The success for the GM customers lies in their ability to prove the Detroit-based carmaker breached the bankruptcy law, which states that people that are entitled to a claim should be notified and if they want can come to court and object. The plaintiffs argue that back in 2009 they weren’t notified about the switch defects – so they didn’t know they have a claim, meaning they can now sue the “new” GM.

Via Bloomberg