When GM filed for bankruptcy in 2009, it created a protection for the company against liabilities from before the company filed. However, New GM appears to still be on the hook for payouts related to previous actions by the company. A judge from New York has ruled that plaintiffs in cases related to GM’s faulty vehicle ignition switches can seek punitive damages.
According to the judge, New GM had employees who were aware of the issue, so the bankruptcy does not provide protection for the company, provided that plaintiffs can demonstrate that GM tried to cover up the issue with the switches. This should not be difficult since the company has openly admitted to knowing of the problem for more than 10 years.
In spite of the fact that GM knew there was a problem, they did not recall vehicles that potentially had ignition switch problems until the beginning of 2014. A large number of people who were aware of the issue, including engineers and safety investigators, transitioned from the old GM to the New GM. Currently, there are approximately 250 pending wrongful death and injury suits in state and federal courts.
Auto product liability does not always necessarily require that a company was aware of a problem for someone to be able to seek legal recourse. If a product was faulty due to gross negligence or a company ignored potential issues, someone may still be able to obtain compensation from the company that produced a vehicle. A lawyer may be able to explain what is involved in these cases and assist someone in obtaining a legal remedy.