G.M. to face long, expensive haul in vehicle recall lawsuits

The company could be charged with liability and fraud for knowing about a defect before it negotiated a restructuring agreement with the U.S. government

General Motors’ recall of 1.6 million vehicles — specifically Chevrolet, Pontiac, Saturn and Opel models around the world — because of faulty ignition switches that have led to the deaths of 13 people has been one of the most high-profile recall cases in U.S. history. Lawyers across the country are bracing for lawsuits against the automaker that will incorporate varied levels of allegations against the company including liability and fraud.

The New York Times reported that the level of complexity awaiting lawyers in the courtroom is due to G.M.’s bankruptcy filing in 2009, and the subsequent restructuring agreement that helped G.M. get its feet back on the ground. After its bankruptcy filing, the federal government bailed out the automaker and helped it regain financial stability with a restructuring agreement that protected G.M. from legal claims levied against the company prior to its bankruptcy. But some of these legal claims are now part of the plethora of cases being brought against G.M., which calls into question the agreement put together to rescue the company from financial ruin. 

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Juliana Kenny

Juliana Kenny is a contributor to InsideCounsel.com, covering a range of topics including patent litigation, conflict mineral laws, executive compensation, and antitrust regulation. Juliana earned B.A.s...

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