Friday, June 26, 2009

The GM Reorganization and Product Liability Claims

Article in the Wall Street Journal -- Car Liability, Dealers Pose New Hurdles For GM Plan, by Mike Spector and Jeffrey McCraken.  Here's an excerpt:

The U.S. Treasury Department is negotiating with more than a dozen state attorneys general to roll back two key features of General Motors Corp.'s bankruptcy plan that would have wiped out billions of dollars in potential claims from car-accident victims and closed auto dealers.

The discussions show how the federal government's GM rescue is brushing up against the limits of its ambitious legal approach, which attempted to use the Bankruptcy Code to override many state legal contracts and protections.

This could ultimately expand the cost of GM's $60 billion bailout, though government officials say it
shouldn't delay the emergence of a "new GM" from bankruptcy protection.
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BGS

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