Tuesday, June 30, 2009
GM to be liable for future claims
US carmaker General Motors has agreed to accept liability for future product claims, paving the way for the firm's emergence from Chapter 11 bankruptcy.
Eight state attorneys general and consumer groups had opposed part of GM's bankruptcy plan to free it from future liability for vehicle defects.
The firm now says it will "assume all products liability claims" regardless of when the product was purchased.
The firm faces a hearing on 30 June over its restructuring plan.
Under the reorganisation plan, the government would hold 60.8% of a "New GM", with 17.5% owned by the United Auto Workers Trust and 11.7% owned by Canada's government.
Documents submitted to a bankruptcy court filed before the weekend showed the firm had accepted responsibility for future claims.
GM had previously said it would not assume responsibility for future claims by consumers against the firm - regarding "accidents or other discrete incidents arising from the operation of GM vehicles".
But there had been concerns that this could leave huge numbers of consumers with limited legal rights, because they would be seeking compensation from a firm with largely unprofitable assets.
"The fact that 'New GM' will protect consumers injured by defective 'Old GM' cars is a positive development for public safety," The Ad Hoc Committee of Consumer Victims of Chrysler and GM said in a statement.
Under the restructuring plan, the new GM will not however take on liability for pending claims against the firm.
Those claimants will have to seek compensation from the old firm.
DATED: 30.06.09
FEED: AW
