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GM Bankruptcy May Protect Automaker From Lawsuits Over Deadly Crashes

n apologizing for its slow response to a faulty ignition switch that triggered a recall of about 1.

6 million cars, General Motors has vowed that the new GM will do business differently than the old company that filed for bankruptcy in 2009.

In a legal twist, that dividing line — between “old GM” and “new GM” — could be a shield for GM in court, reducing potential legal liabilities by millions of dollars, if chastened executives are willing to invoke it.

Under the terms of its restructuring, GM’s product liability extends only to accidents that happened after the reorganized company left bankruptcy in July 2009. Plaintiffs injured before that time would have to seek redress from the defunct shell of GM in Bankruptcy Court, where the chance of compensation is slim.

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Written by Lewis Shaw

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