General Motors Company (GM) is facing 79 lawsuits that are demanding as much as $10B

Posted May 20, 2014

General Motors Company (NYSE:GM) is facing 79 lawsuits by customers that are demanding as much as $10 billion for the last value of their old cars due to defects that led to the recall of 2.59 million cars. GM said in a U.S. Bankruptcy Court filing on Monday that it has been sued in 20 additional class-action lawsuits related to the ignition switch defect since April 30th.

Several lawsuits state that the old GM promoted the vehicles as being safe and reliable. And some of the lawsuits claim that GM has successor liability. The “new GM” bought and operated “old GM” as a continuing business. Some lawsuits also named Delphi Corp. as a defendant because that company manufactured ignition switches for GM.

General Motors asked a judge to rule that it is not liable for damage claims resulting from company actions before the company went bankrupt in 2009. A judge panel is going to decide this month whether to combine the suits into one and what federal court should handle them. Judges in Texas and California have stopped the suits pending a ruling on which of their claims are allowable. The bankruptcy judge has told other customers to explain to him why they should not be forced to wait until September to pursue their cases.

GM’s ignition switch recall involves old models of Chevrolet Cobalts, Saturn Ions, and other cars for faulty ignition switches that can turn off while driving. This would cut off engine power and power steering. It may prevent air bags from deploying in crashes. GM said it knows of 13 deaths that were linked to this issue.