GM looking to bankruptcy court for lawsuit protection - New York News

GM looking to bankruptcy court for lawsuit protection

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DETROIT (WJBK) - General Motors says it will ask a federal bankruptcy judge to shield the company from legal claims involving conduct before its 2009 bankruptcy.

"As part of the bank, General Motors got a deal that said all litigation, all liability, for the company before the bankruptcy goes to the old GM," explains John McElroy, an auto industry analyst.

The company revealed its strategy late Tuesday in a motion filed in a federal court case in Corpus Christi, Texas, surrounding defective ignition switches that have led GM to recall more than 2 million cars.

GM's motion is asking the judge in Texas to delay action on the lawsuit until the bankruptcy court rules and other federal courts decide if the case should be combined with other lawsuits.

But the automaker says it's not asking the Texas judge to delay action on a motion to force GM to tell customers not to drive their cars until they are repaired.

The motion says more than 30 cases have been filed against GM since February.

McElroy believes the victims will still be compensated regardless. "It looks like the company is trying to bury that in the old GM. However, I do believe, it will step forward with a multi-billion dollar fund to compensate anybody who got hurt or in the case of some families, even fatalities involved."

As the investigation and the compensation review continue, the Center for Auto Safety alleges GM, according to its own documentation, already had two versions of the ignition switch in 2001 and chose cost over safety and implemented the better version secretly in 2006.

"A prime focus right now for me and a core group of people is taking care of the customers that have been impacted, and getting their cars fixed as soon as possible," said GM CEO Mary Barra while speaking at the New York Auto Show.

Copyright 2014 by myFOXDetroit.com. The Associated Press contributed to this report. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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