Auto Bailout
GM to Accept Some Product Liability
The Wall Street Journal reports, "General Motors Corp., under pressure from state attorneys general, agreed to assume legal responsibility for injuries drivers suffer from vehicle defects after the auto maker emerges from U.S. bankruptcy protection. The concession means consumers who are injured in car accidents after GM emerges from bankruptcy protection will be able to bring product-liability claims against the government-owned auto maker."
However, the Washington Post notes, "those with past claims would have to pursue the GM left behind in bankruptcy with nothing but unwanted assets, debts and other liabilities. That means these consumers are likely to recover little, if anything." Consumers injured in an accident caused by a defect can sue the new company that emerges from bankruptcy even if the car involved in the accident was built by pre-bankruptcy GM, but those who have lawsuits pending against the company that were launched before bankruptcy have effectively lost their cases.
The Journal explains, "Car-accident victims with pending lawsuits, those who won damages against GM before it filed for bankruptcy and those who get in accidents while the auto maker is under bankruptcy protection will still be unable to bring claims against the new GM. They would remain with other unsecured creditors making claims against the old GM. Those victims are likely to recover little or nothing."
Reuters notes, "A group representing about 300 Americans with lawsuits against GM for alleged product defects has objected to the reorganization since those injury and wrongful-death claims would have to be paid out from the sale of GM's mostly worthless assets." The group "said in a bankruptcy court filing earlier this month the automaker's insurance would only cover product liability claims of up to $35 million per claim," which "would not be sufficient to cover the claims of almost any of the lawsuits since many of the cases involved 'devastating injuries' from alleged vehicle defects."
It is common for companies to emerge from bankruptcy with no legal liability for their pre-bankruptcy products. In Chrysler's recent bankruptcy, the court agreed to free Chrysler of all liability for pre-bankruptcy products, and the AP reports, "consumers hurt by fellow automaker Chrysler LLC still have little recourse."
Reuters notes that GM "said it would continue to pay 'lemon law' claims so that consumers would be entitled to a refund or replacement for defective vehicles."
Report: China May Block Hummer SalePosted: Jun. 29, 2009 10:06:16 a.m. |
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GM's plan to sell its underperforming Hummer division to an obscure Chinese construction equipment manufacturer may have hit a snag. USA Today reports, "China's planning agency is likely to reject a Chinese company's bid to acquire General Motors' Hummer unit, in part because its gas-guzzling vehicles conflict with Beijing's conservation goals, state radio reported." The agency, known as the National Development and Reform Commission, may also block the sale on the groups that "Sichuan Tengzhong Heavy ... |
Legal Bill for Chrysler Bankruptcy? $21 Million...in MayPosted: Jun. 26, 2009 10:06:05 a.m. |
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Failure isn't cheap, apparently. Bloomberg reports, "Chrysler LLC's law firm Jones Day said it incurred fees and expenses of $12.7 million in May in its work for the bankrupt automaker, while other lawyers and advisers seek $8.5 million more, according to court filings." Chrysler had already spent "$18.9 million from November to May, partly to try to keep itself out of bankruptcy," before finally succumbing to the court process. According to Reuters, Jones Day employed ... |
Lawsuits Seek to Block GM Bankruptcy SalePosted: Jun. 22, 2009 11:06 a.m. |
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General Motors' bankruptcy plan is headed to court...again and again. The Detroit News reports, "The proposed sale of General Motors Corp.'s best assets drew a flurry of objections Friday from attorneys general in 10 states, union retirees and small bondholders, setting up potential speed bumps in the automaker's path out of bankruptcy." Among the most serious challenges to the bankruptcy plan is the objection by ten states, who argue that "the asset sale would deprive consumers the right to pursue product liability claims." . . . |
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Fans of oddly-placed ignitions and clamshell hoods, rejoice. In its quest to shed brands, GM has finalized a deal to sell Saab. According to Reuters, "Sweden's Koenigsegg, maker of some of the world's fastest and most expensive sports cars, has struck a deal to buy loss-making Saab Automobile from General Motors, the companies said on Tuesday." The New York Times reports, "The companies said they had signed a memorandum of understanding, contingent on $600 million of financing from ... |
GM: No, Really, Stop Buying our StockPosted: Jun. 11, 2009 10:06:02 a.m. |
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General Motors would like to remind you that it's worthless. It's bankrupt. It's gone. It has no value. The Los Angeles Times reports, "General Motors Corp. filed for bankruptcy protection, got kicked off the New York Stock Exchange and out of the Dow Jones industrial average. And its stock has mostly been rising ever since. In fact, GM has been one of the hottest issues on Wall Street over the last six trading sessions, surging from 61 ... |
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The New York Times reports, "With the touch of pen to paper and a simple wire transfer, Chrysler completed its deal with Fiat on Wednesday morning, largely ending its quick trip through bankruptcy. The last obstacle to an exit -- a temporary stay imposed by the Supreme Court -- was lifted late Tuesday, after the nine justices declined to hear a challenge of the deal by three Indiana state funds and several consumer groups." The Wall Street Journal explains, "The Supreme Court ... |
GM Officially Files BankruptcyPosted June 1, 2009 10:29:39 a.m. |
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At 7:57 a.m. this morning, a court clerk in New York accepted a Chapter 11 bankruptcy petition that launches what many analysts are calling the most complex bankruptcy case in U.S. History.
In the filing, the New York Times reports, "G.M. said it had $82.3 billion in assets and $172.8 billion in debts." The filing "culminates a remarkable four months of confrontation between Washington and Detroit that is expected to result in a drastic downsizing of the company. It also places the government in uncharted territory as a business owner, as it takes a majority ownership stake in the company during its restructuring." . . . |
Court Approves Chrysler Sale to FiatPosted: Jun. 01, 2009 10:06:11 a.m. |
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On the same day that General Motors filed for bankruptcy protection, cross-town rival Chrysler took what may be its most significant step toward emerging from bankruptcy. The Washington Post reports, "A federal bankruptcy judge approved the sale of most of Chrysler LLC's assets to Italy's Fiat, moving the American automaker a step closer to its goal of a quick exit from court protection." A federal judge rules "that a speedy sale - the centerpiece of a restructuring plan backed ... |
Reports: Despite Bondholder Deal, GM to File Bankruptcy MondayPosted: May. 29, 2009 12:05:09 p.m. |
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General Motors surprised auto industry observers by reaching an 11th-hour deal with a group of bondholders who own $27 billion worth of the company's debt, but press reports say the development won't stave off bankruptcy. Bloomberg reports, "General Motors Corp., the world's largest automaker until its 77-year reign ended in 2008, plans to file for bankruptcy protection on June 1 and sell most of its assets to a new company, people familiar with the matter said. GM ... |
Union: GM Won't Import Cars from ChinaPosted: May. 29, 2009 12:05:56 p.m. |
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General Motors' plan to import tens of thousands of Chinese-built cars to the U.S. over the next several years may be on hold. The AP reports, "General Motors Corp. agreed not to import Chinese-made subcompact cars to the U.S. as part of its concession deal with the United Auto Workers, union President Ron Gettelfinger said Thursday. Instead, the company will build up to 160,000 of the cars per year at an existing U.S. factory and sell ... |