Released: June 30, 2009

New GM to accept some liability

Source: Tomoeh Murakami Tse & Kendra Marr, Washington Post (Free Registration)

General Motors will assume responsibility for product liability claims filed after the carmaker emerges from bankruptcy protection, a concession that removes a potential obstacle to the Obama administration’s plan for the company’s quick restructuring.

Under the deal reached by the administration, GM and state attorneys general, the automaker will accept claims arising from defective-vehicle accidents that occur after it emerges from Chapter 11 proceedings. Consumers could file the claims even if their vehicles were made by the “old” GM. However, those with past claims would have to pursue the GM left behind in bankruptcy with nothing but unwanted assets, debts and other liabilities. That means these consumers are likely to recover little, if anything.

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