July 2, 2009
GM Product Liability Plaintiffs Better Off Than Secured Creditors
General Motors Corporation has agreed to assume responsibility for all future liability claims filed after the automaker emerges from bankruptcy, regardless of when the vehicle was made. GM had planned to include its product liability claims with its bad assets in the "old GM," grouping them with the company''s other unsecured creditors to fight over proceeds from the sale of GM's bad assets. The move would have relieved the "new GM" from any future liability for defective products made by the "old GM." Although no one has explained why potential product liability plaintiffs should be treated differently than other unsecrued creditors injured by GM's bankruptcy, the company relented in the face of intense public pressure and effectively put these creditors at the head of the line of those with claims against the company.
July 2, 2009 | Permalink
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