Thursday, December 3, 2015
Plaintiffs suing General Motors over faulty ignition switches can seek punitive damages despite GM's reorganization after bankruptcy
Back in May I wrote about the possibility that a large number of lawsuits filed against General Motors could be dismissed following a ruling blocking lawsuits filed against GM over actions that predate its 2009 bankruptcy, declaring that “New GM” and “Old GM” are two different companies and that the new company is not liable for the actions of the old one. The back story on that is here, here and here. But the Chicago Daily Law Bulletin is reporting now that "[a] federal bankruptcy judge has ruled that people suing General Motors over faulty ignition switches can seek punitive damages that could cost the company millions of dollars or more. When General Motors emerged from a 2009 bankruptcy, it became known as “New GM.” The new company essentially was shielded from liabilities of the old company that was left behind. But Judge Robert Gerber in New York ruled Monday that employees and knowledge transferred from the “Old GM” to the new company. Plaintiffs, he ruled, can seek punitive damages if they can show that “New GM” knew of the faulty switches but covered it up."