Last July, the Second Circuit Court of Appeals ruled that GM was not shielded through its Chapter 11 reorganization from liability for accidents and injuries related to the ignition switch defect it had admitted to having known about for more than a decade.
New GM filed a writ with the Supreme Court, which this week refused to hear an appeal of the Second Circuit Court's ruling.
Therefore, GM is now facing potentially billions of dollars in claims arising from accidents, injuries and fatalities attributed to the faulty ignition switches installed in millions of vehicles.
This seems like a just outcome to me. I had thought that tort liability could not be discharged through bankruptcy, but in this case it apparently could have been had GM only disclosed the issue when the transfer of assets from Old GM to New GM was made in 2009. GM didn't do so and the result is that GM will now have to cover the consequential damages related to its past misdeeds.
Good write-up on page B1 of last Tuesday's WSJ.
One wonders what other skeletons might be lurking in the closet.
New GM filed a writ with the Supreme Court, which this week refused to hear an appeal of the Second Circuit Court's ruling.
Therefore, GM is now facing potentially billions of dollars in claims arising from accidents, injuries and fatalities attributed to the faulty ignition switches installed in millions of vehicles.
This seems like a just outcome to me. I had thought that tort liability could not be discharged through bankruptcy, but in this case it apparently could have been had GM only disclosed the issue when the transfer of assets from Old GM to New GM was made in 2009. GM didn't do so and the result is that GM will now have to cover the consequential damages related to its past misdeeds.
Good write-up on page B1 of last Tuesday's WSJ.
One wonders what other skeletons might be lurking in the closet.