A New York Judge made a ruling in favor of General Motors Company (NYSE:GM), shielding the company from lawsuits related to crashes resulting from faulty ignition switches.
The court ruling by Judge Robert Gerber gives General Motors protection against lawsuits filed before its bankruptcy during the financial crisis of 2009. The move will save the company billions that victims could have claimed as settlements for the faulty ignition switches.
General Motors Company (NYSE:GM) is however not in the safe zone. Judge Gerber’s ruling defended the company against lawsuits backdated before 2009. Victims can still make claims from the company if they can prove that the incident occurred after the company recovered from bankruptcy. Lawyers supporting the litigant claim that the automobile company failed to disclose the issues about the defective ignition buttons. The faulty switches are said to be responsible for vehicle crashes, as well as deaths. The estimated liability by one of the lawyers amounts in the range of $7 billion to 10 billion.
The company will also face charges for involving old vehicles after the bankruptcy period. GM acknowledged liability for the accidents that occurred in the post-bankruptcy period. The company even set up a fund that will offer compensation for the accidents and deaths that occurred in relation to the above. The fund will be facilitated by Attorney Kenneth Feinberg. So far, he has approved 84 fatal accident claims over which each entitled party will receive at least $1 million. Other claims have also been brought forward, with 11 being cases where victims suffered severe, life altering injuries. Victims suffered less consequential injuries made about 145 claims.
The rest of the claimants are awaiting approval. In total, they are slightly over 1000 cases. General Motors expects to pay around $400 million to $600 million in terms of compensation so far.
More victims are likely to appear in the future. The fact that the company has been exempt from compensating cases before 2009 gives GM a sigh of relief. If the judge had not made judicial ruling. The lawsuit would have demanded exponential sums of money.
