GM Tells Manhattan Court It's Not Liable for Claims Over Pre-bankruptcy Cars
GM tells court it not liable for claims over pre-bankruptcy carsReuters

General Motors has said it should not have to face lawsuits related to safety issues in cars made before its 2009 bankruptcy, including a defective ignition switch that led to the recall of 2.6 million cars earlier in the year.

A brief filed in the Manhattan bankruptcy court which presents GM's legal arguments, marked the opening round in a lawsuit from GM customers who say the Detroit automaker must compensate them for losses related to recalls this year.

The company is facing some 130 lawsuits over accidents and lost vehicle value.

Plaintiffs' are due to respond on 16 December and Judge Robert Gerber of the US Bankruptcy Court in Manhattan has scheduled a hearing for 26 January, 2015.

Shares in America's leading automaker have dropped some 25% so far this year following a spate of recalls, primarily surrounding defective ignition switches linked to fatal crashes.

The Arguments

In April, GM asked Judge Gerber, who oversaw the bankruptcy, to throw out claims related to vehicles made before 2009 based on the terms of the sale order that created the so-called "New GM".

Liabilities related to older vehicles were largely retained by a shell company now known as "Old GM".

But plaintiffs' lawyers have asked Gerber to rule that bankruptcy protection does not apply because their clients were not informed about the problems at the time and as such could not take legal action against GM.

Earlier in the year, US regulators imposed a $35m (£22m, €28m) fine on the Detroit automaker for the delayed recall of the 2.6 million vehicles.