General Motors Company (GM) is getting sued for $10 billion

Posted Jun 18, 2014

General Motors Company (NYSE:GM) is liable for up to over $10 billion in damages following the ignition switch recall after the issue lowered the resale value of millions of vehicles, according to a new lawsuit.

The lawsuit was filed by attorneys Hagens Berman Sobol Shapiro and it claims that GM hurt its customers by concealing defects, which led to recalls of more than 20 million vehicles in 2014 so far. This devalued a variety of late-model vehicles by around $500-$2,600 in resale value, according to Reuters.

The plaintiff in the case is California resident Anna Andrews. Andrews is seeking class-action status for people that owned or leased GM vehicles sold between the company bankruptcy and April 1, 2014.

This is the first legal claim that GM owes customers compensation for damaging its brand and reputation, which is a total exceeding $10 billion and would be paid to an estimated 15 million vehicle owners. GM brought in around $3.8 billion in net earnings last year.

?GM?s egregious and widely publicized conduct and the never-ending and piecemeal nature of GM?s recalls has so tarnished the affected vehicles that no reasonable consumer would have paid the price they did when the GM brand meant safety and success,? states the complaint.

It is unknown how successful the lawsuit will be.

[Source: Reuters]