Once Upon a Bankruptcy

May 19th, 2017

Once upon a time …

There was a car company called General Motors. General Motors had a problem. Well, General Motors, or GM as most people call them, actually had several problems, but we’re just going to focus on one today.

That problem is that GM made some cars with faulty ignition switches. These switches caused a lot of problems for other people. Unfortunately, these problems caused some accidents that were a bit more serious than spilt milk. These problems plagued a number of GM vehicles like the Chevrolet Cobalt and the Saturn Ion. And Impalas and Malibus. And Monte Carlos, Camaros, Buicks, Pontiacs, Oldsmobiles and Cadillacs.

The faulty switches could turn the car off and leave it without power – even the airbags.  And some people got hurt or killed.

GM knew about the problem for several years before enough people died that they put out a recall on the switches. They recalled over 2.5 million vehicles. GM also had to pay $900 million dollars to settle criminal charges regarding those switches and set aside almost $600 million for a compensation fund.

Then some other problems caught up with GM. In 2009 they declared bankruptcy and had to be bailed out by the Federal Government. GM said that the bankruptcy should wipe out whatever claims were outstanding.

Well some courts didn’t think that was fair.  GM appealed to the Supreme Court. The Supreme Court let the lower court’s ruling stand which allowed existing claims to go forward. Why? Because GM knew about the flaw before the bankruptcy and they should have told customers.

So now the cases can go forward. And there could be hundreds of them.

But because of these faulty switches, some people are not living happily ever after. If you or a loved one are one of these and need help with your case, please give us a call.

NOT The End

Comments

comments