Judge Rules General Motors Can Keep Its Bankruptcy Shield

General Motors will not have to face a number of lawsuits and as much as $10 billion in damages over a ignition-switch defect that led to the recall of 2.6 million vehicles.

U.S. Bankruptcy Judge Robert Gerber announced yesterday that the bankruptcy shield, which protects new GM from claims originating before its 2009 bankruptcy and restructuring will be upheld. Now this ruling applies to a small number of suits dealing with crashes before July 2009. Most of the suits filed against GM deal with economic losses, such as diminished resale value.

Judge Gerber said people claiming economic losses may “assert otherwise viable claims against New GM for any causes of action that might exist arising solely out of New GM’s own, independent, post-acts, so long as those plaintiffs’ claims do not in any way rely on any acts or conduct by Old GM.”

GM was happy with Gerber's decision, saying "properly concluded" that claims based on old GM's conduct are barred.

Lawyers who are representing plaintiffs against GM aren't pleased with the decision.

"This ruling padlocks the courthouse doors. Hundreds of victims and their families will go to bed tonight forever deprived of justice. GM, bathing in billions, may now turn its back on the dead and injured, worry-free," said Bob Hilliard, a Texas lawyer who is representing a number of plaintiffs against GM.

Source: The Detroit News