June 28, 2009

Rights of Future Victims to Sue Over Defective GM Vehicles Protected Under Amended Bankruptcy Sale

Statement of Adina Rosenbaum, Attorney, Public Citizen*

We are gratified the General Motors (GM) bankruptcy sale documents have been amended to state that the "new GM" will assume liability for future product liability claims -- that is the claims of people who have not yet been, but who will in the future be, injured or killed in accidents caused by defects in GM vehicles.

The Center for Auto Safety, Consumer Action, Consumers for Auto Reliability and Safety, National Association of Consumer Advocates and Public Citizen filed objections to the GM bankruptcy sale because it attempted to immunize the new GM from claims of people who have been or will be victimized by defective GM vehicles.  We argued that allowing the sale to go through "free and clear" of current and future claims would violate the Bankruptcy Code and that it would violate due process to take away the rights of people who will be injured in the future and do not yet even know that they will one day have claims.

We are pleased that the negotiators understood that taking away the rights of future product liability claimants is illegal and immoral.

READ the materials in the case.

* Adina Rosenbaum represents the Center for Auto Safety, Consumer Action, Consumers for Auto Reliability and Safety, National Association of Consumer Advocates and Public Citizen in the GM bankruptcy case. 

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Statement of Clarence Ditlow, Executive Director,  Center for Auto Safety

We expect that, in further negotiations, the parties will recognize the need to protect those with current product liability claims while retaining full lemon law rights in the amended sale agreement.  

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